Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — WALES

Investment Bank

Mr. Anderson: asked the Secretary of State for Wales what reply he has given to the Welsh Council's recommendation that an Investment Bank for Wales be established.

The Secretary of State for Wales (Mr. George Thomas): I have told the Council that, as requested by it, I have brought its report on "The availability of capital for small firms in Wales" to the attention of those of my colleagues who also have an interest in the matters which it covers.

Mr. Anderson: Does my right hon. Friend agree that, in the present financial situation of small firms in Wales, the establishment of such a bank would be highly desirable, if not necessary? Would he care to speculate on the extent of the assistance which the Government will be prepared to provide, either financial or otherwise?

Mr. Thomas: The majority of the Council felt that there was a need for such an institution. There is a minority which is not so satisfied. We are now examining the proposal. I obviously want to encourage anything that will improve development in Wales, but we must examine it in depth. On the question of financial support, there is no proposal that Her Majesty's Government should help.

Local Government Amalgamations (Staff)

Mr. Gower: asked the Secretary of State for Wales what discussions he has now had with local government officers in Wales and with their associations and unions regarding the consequences on local government employment of implementation of his proposals for amalgamation of councils; and if he will make a statement.

Mr. George Thomas: None has yet been held, but I intend to discuss these matters, including my proposals for a Welsh Local Government Staff Commission, with local authority associations and with representatives of the staffs of local government as soon as possible.

Mr. Gower: As possible amalgamations may create difficulties in finding suitable employment for some officers quickly, does the right hon. Gentleman plan to create a central bureau to facilitate the placing of these officers in appropriate jobs?

Mr. Thomas: The hon. Gentleman has made that proposal before, and I assure him that, if he has any new constructive arguments to advance in support of his plea, I will gladly look into them.

Mr. Gibson-Watt: Will the right hon. Gentleman answer my hon. Friend's question? Is he or is he not setting up a bureau? He asked my hon. Friend to make a helpful suggestion, but I think that he has made one.

Mr. Thomas: I am sorry—I thought that the hon. Gentleman was up to date. I have already told his hon. Friend that I do not see advantage in creating such a register at present.

Mr. Gwynfor Evans: Is the right hon. Gentleman aware that his plans for amalgamation will make local government in Wales less local and less democratic, and will involve less participation, without producing more efficiency or even economy? Could not a Royal Commission be appointed to inquire into local government in Wales?

Mr. Thomas: The proposals are more democratic than that advanced by the hon. Gentleman that Wales should have


a Governor-General—a proposal which has been rejected by most other countries.

Barry Accident and Surgical Hospital

Mr. Gower: asked the Secretary of State for Wales if he is aware of continuing concern at Barry and in adjacent parts of South-East Glamorgan, regarding the future of the Barry Accident and Surgical Hospital; and if he will give an assurance that Barry and district will not be deprived of the services of this hospital.

The Minister of State, Welsh Office (Mrs. Eirene White): Yes, Sir. The Welsh Hospital Board will shortly be carrying out local consultations about the reorganisation of hospital services in the greater Cardiff area, which includes Barry. My right hon. Friend will consider the Board's proposals for the Barry Accident and Surgical Hospital in the light of representations received as a result of these consultations.

Mr. Gower: Is the Minister of State aware that in recent years hardly any issue has caused such deep concern over a wide area than the possibility which has been mooted that this hospital might be discontinued? Will the Minister and her right hon. Friend bear in mind that in the summer time this area provides hospital services for a total population well in excess of 100,000?

Mrs. White: As the hon. Gentleman is aware, the whole purpose of holding consultations is precisely that such considerations should be given their full weight.

Rural Development Board

Mr. Gibson-Watt: asked the Secretary of State for Wales what recent discussions he has had with interested parties about the future of the Welsh Rural Development Board.

Mr. George Thomas: There have been no recent discussions. The statutory period for objections to the modified boundary has only recently expired, and my right hon. Friend the Minister of Agriculture, Fisheries and Food and I are considering the next step. It will of course be for the House to decide the future of the proposed Board when the draft Order is laid.

Mr. Gibson-Watt: Might I take the opportunity from these benches to congratuate the hon. Member for Cardiff, North (Mr. E. Rowlands) on his elevation to the Welsh Office, and to wish him luck. At the same time, we are sorry to see the going of the hon. Member for Gower (Mr. Ifor Davies) who was in that office for three years.
Is not the right hon. Gentleman aware now, some time after the inquiry under the chairmanship of Sir Ben Bowen Thomas, that there is still in Central Wales an immense amount of anxiety about and opposition to the idea of this Board As it is estimated that well over 80 per cent. of the people in this area are objectors, will the Government think again about this?

Mr. Thomas: I much appreciate, as I know my hon. Friend does, the complimentary remarks made by the hon. Gentleman to the new Under-Secretary and to my former colleague my hon. Friend the Member for Gower (Mr. Ifor Davies).
I am aware that there are people in Mid-Wales with a vested interest in misrepresenting the Rural Development Board. I know that this has been done for political reasons. Half a million £s will go into the pockets of the farmers of Mid-Wales when this scheme is running fully.

Mr. Gibson-Watt: Will not the Minister face the fact that in the four counties concerned there is intense opposition which has not been engendered from a party political point of view, and that it is about time that his party realised that this is a matter which is causing great local concern in Mid-Wales?

Mr. Thomas: My hon. Friend the Under-Secretary of State at the Home Department is the Member of Parliament for this constituency. He is well-informed about opinion there, as I am. I believe that this scheme will be welcomed by the farmers when they realise the great benefits which it brings to them.

House Mortgage Grants

Mr. Gibson-Watt: asked the Secretary of State for Wales what total moneys have been made available to Welsh local authorities for house mortgage grants during the current financial year.

The Under-Secretary of State for Wales (Mr. Edward Rowlands): I thank the hon. Gentleman for the kind words he expressed on my appointment, and I should like to pay tribute to my predecessor the hon. Member for Gower (Mr. Ifor Davies). I hope that I can carry on the work on which he has been engaged for the last three years in my present post.
The answer to the Question is a figure of £4 million.

Mr. Gibson-Watt: Would the hon. Gentleman realise that there is a continuing anxiety on this matter since at various times in the recent past several important local authorities in Wales have not been able to get sufficient funds for this purpose?

Mr. Rowlands: I am aware of the anxiety and we are trying to do everything we can for local authorities, especially those who have priority in that they have a good stock of older houses for which this type of finance is intended. I am seriously concerned about this matter.

Roads (Expenditure)

Mr. Gwynfor Evans: asked the Secretary of State for Wales what sums the central Government spent on roads in Wales in 1966–67, 1967–68, and 1968–69.

Mr. George Thomas: I refer the hon. Member to the reply given to him on 28th April, 1969. Actual expenditure in 1968–69 was £14·8 million. In addition local authorities carried out a further £16·4 million worth of work which was in part financed by the central Government through the rate support grant.—[Vol. 782, c. 188.]

Mr. Evans: Why are the Government cutting down so greatly on expenditure on roads in Wales but not on similar expenditure in England? Is the right hon. Gentleman not aware that the construction of major highways is the key to industrial and economic development, and that the failure of the Government in this matter is a major contribution to the fact that there are 51,000 fewer men in work in Wales today than was the

situation when Labour came to power in 1964?

Mr. Thomas: The hon. Member is a master at twisting the facts. He knows that the figure I have given is not a decrease but an increase. Expenditure on roads in Wales is running at an all-time record. There are over £100 million worth of road schemes in our preparation pool.

Mr. Gibson-Watt: But, as the right hon. Gentleman knows, the work in the preparation pool will probably be carried out by the next Government, which may not be his. Would the Minister tell the Welsh local authorities when he will revoke the Government's decision to cut down on road maintenance which is a matter of great importance to the county councils?

Mr. Thomas: The carrying out of all road schemes is a long business, and we shall be continuing this work in the next Parliament as we have in the past. On the question of road maintenance, the hon. Gentleman will know that work under this head is covered in the rate support grant for local authorities. I am not ashamed of the programme which we have put forward.

Dual Carriageway, Motorways and Trunk Roads

Mr. Fred Evans: asked the Secretary of State for Wales what was the total mileage of dual carriageway, motorways and trunk roads in use in Wales on 1st January, 1969; and how many miles have been brought into use since then.

Mr. E. Rowlands: Fifty-one miles and 8·5 miles respectively, representing an increase of over 16 per cent.

Mr. Evans: In view of the fact, of which my hon. Friend is well aware, that some people in Wales are dedicated to basking in a sense of deprivation, will he say if there is any further good news he can give us about projected developments?

Mr. Rowlands: A further 9·5 miles of trunk roads are under construction at present and work on a further 11·3 miles of dual carriageway will be started in the next few months.

Local Authorities (Traffic and Transport Plans)

Mr. Fred Evans: asked the Secretary of State for Wales how many Welsh local authorities have so far submitted traffic and transport plans in accordance with the request from the Welsh Office in February, 1968.

Mr. E. Rowlands: Five.

Mr. Evans: Does not my hon. Friend consider this to be a most disturbing situation? If plans are not submitted, how will Welsh local authorities deal with traffic problems of the future? Will he call the attention of Welsh local authorities to the urgent need for the submission of these plans to protect the future of their own people?

Mr. Rowlands: These plans are important and local authorities should make every endeavour to submit them as soon as possible. They were asked for them in February, 1968.

Oral Answers to Questions — NATIONAL FINANCE

International Monetary Fund

Mr. Marten: asked the Chancellor of the Exchequer if he will make a statement on the latest visit to this country by members of the International Monetary Fund team.

Mr. Biffen: asked the Chancellor of the Exchequer what discussions he had with the members of the International Monetary Fund during their recent visit to London; and if he will make a statement.

The Chief Secretary to the Treasury (Mr. John Diamond): A team from the International Monetary Fund came to London in August. This was one of the regular consultations which under the arrangements already announced, precede each purchase on our current phased stand-by. The August consultation was related to the purchase we made in September. The talks were confidential, as is usual.

Mr. Marten: Does the Minister recall that in the report of the International Monetary Fund which came out after that visit on 23rd September Mr. Schweitzer said that Britain had to repay a large

amount of debt in a short time, whereas the present Paymaster-General, speaking to the European Monetary Conference, said exactly the opposite, that we should have to fund a lot of our short-term debt into long-term debt. Which policy are the Government following?

Mr. Diamond: My right hon. Friend did not make a statement of policy and I am not aware of a report having been issued by Mr. Schweitzer.

Mr. Biffen: Did the Government discuss with the I.M.F. the virtues of a floating exchange rate for sterling, or did they follow the precept that the inevitable is undiscussable until it has actually happened?

Mr. Diamond: The hon. Gentleman knows that these discussions are confidential.

Mr. Barnett: Is it a fact that money supply is being restricted at a rather greater rate than was originally forecast to the I.M.F.? If so, by how much is it intended to improve the situation and in what way? Now that the balance of payment figures are so much better, is it not time to get away from the neurosis about them and to publish trade figures quarterly instead of monthly?

Mr. Diamond: The last is an interesting but separate question. On the former question, the course of domestic credit expansion, to which I imagine my hon. Friend is referring, is satisfactory and compatible with our economic objectives and policies.

Mr. Hordern: The right hon. Gentleman said that he had no news or knowledge of the report given by Mr. Schweitzer. But in a report in The Times newspaper on 24th September Mr. Schweitzer is reported as saying that
In his report released today"—

Mr. Speaker: Order. No quotations are permitted in a supplementary question.

Mr. Hordern: —that Britain will be compelled by short-term debts to adopt more severe domestic conditions. Are the comments made by the Paymaster-General about rephasing our international obligation in line with our obligations to the International Monetary Fund as our creditors see them, or not?

Mr. Diamond: The trouble is that the hon. Gentleman has no accurate knowledge of the comments made by my right hon. Friend.

Mr. Sheldon: Can my right hon. Friend confirm that the precise amount of domestic credit expansion accepted in the Letter of Intent remains the policy of Her Majesty's Government? Is it not time to accept that precise figures cannot be quantified in the way in which was then thought possible, and that further figures suggest that there is little relationship of the kind mentioned between domestic credit expansion and the growth of the gross national product?

Mr. Diamond: The formula there used is an aid to understanding one aspect of economic development. No one suggests that it is the whole story. It is a valuable assistance to understanding economic development in one aspect.

Mr. Bruce-Gardyne: asked the Chancellor of the Exchequer when he now expects to make a start on the fulfilment of undertakings given in his predecessor's letter of intent to the International Monetary Fund regarding the liberalisation of controls on capital movements.

Mr. Diamond: My right hon. Friend has no present proposals for changes in this field.

Mr. Bruce-Gardyne: Can the Chief Secretary say whether the Chancellor of the Exchequer regards the specific undertaking given in paragraph 13 of his predecessor's Letter of Intent to the I.M.F. as binding upon him? If he does, does not that mean that the liberalisation of capital transactions is a prior responsibility on any accumulated funds which may now come into the balance of payments?

Mr. Diamond: The answer to the first question is "Yes", to the second one, "No".

Dividend Distribution

Mr. Boyd-Carpenter: asked the Chancellor of the Exchequer whether he has now reached a decision on the question of seeking powers to restrict distributions by companies by way of dividend after the end of the present calendar year.

Mr. Diamond: I have nothing to add to the Answer I gave to the hon. Member for South Angus (Mr. Bruce-Gardyne) on 14th October.—[Vol. 788, c. 60.]

Mr. Boyd-Carpenter: Is it not highly unsatisfactory that companies should be left in ignorance, when the date concerned is only just over two months ahead, of what the Government intend or do not intend to do by interfering in their activities?

Mr. Diamond: The right hon. Gentleman has made it clear that the companies know their position to the end of December with precision. For the period after that, I am not aware that there is any considerable inconvenience. I would be anxious to meet it if I knew of it.

Mr. Higgins: Is it not absurd for the Government even to continue giving this sop to their Left wing when their prices and incomes policy is in a shambles? Is it not the effect of this restraint to distort the allocation of resources to the economy and reduce the growth of national income? Will the right hon. Gentleman make his position clear and say that he will not continue this absurd farce?

Mr. Diamond: I will make my position perfectly clear and say that the Government will have an announcement to make at the earliest possible opportunity and trust that no major inconvenience will be caused in the meantime.

National Savings

Mr. Edward M. Taylor: asked the Chancellor of the Exchequer what was the total net increase in National Savings in the first nine months of 1969; and what were the comparable increases in the nine months of 1967, 1965 and 1963, respectively.

The Financial Secretary to the Treasury (Mr. Dick Taverne): The provisional figures show a decrease of £37 million in the first nine months of 1969.
Comparable figures for 1967, 1965 and 1963 were increases of £131 million, £89 million and £257 million, respectively.

Mr. Taylor: Are not these very depressing figures yet another sign that rapidly rising prices are undermining public confidence in savings? Is there not a danger


that the new "Save As You Earn" scheme will be a flop unless it has a guarantee that the money invested will not be eaten away by inflation?

Mr. Taverne: It does not show that savings have suffered. If one looks at national savings in the context of personal savings, in the first six months of this year the percentage as disposable income was marginally higher than in the two previous calendar years. As for "Save As You Earn", so far the reports are very encouraging.

New 5p. Pieces

Mr. Gresham Cooke: asked the Chancellor of the Exchequer what further steps he will take to encourage shopkeepers and others to make use of new 5p. pieces instead of sixpences, so as to encourage a sufficient distribution of new 5p. pieces by 1971.

Mr. Taverne: This is a matter for the Decimal Currency Board, in consultation with trade associations. The Board are doing everything they can to encourage the use of the new 5p. pieces, particularly in change-giving and in this they have my full support. I will gladly consider any suggestions which the hon. Member may care to put forward.

Mr. Gresham Cooke: Is the hon. and learned Gentleman aware that present indications are that on D-day, which is only 16 months hence, we shall enter that period with a massive surplus of sixpences, and a shortage of shillings and new 5p. pieces, which will be the lowest silver coins? Should not a further effort be made to advertise the necessity for shopkeepers and others to bring the new 5p. pieces into use now?

Mr. Taverne: I agree that every effort should be made to advertise the need to use the new 5p. pieces. A newsletter was issued by the Decimal Currency Board and widely circulated in trade circles to encourage retailers to alter their change-giving habits to use the new 5p. pieces more widely than has been the case until now.

Mr. Rankin: Will my hon. and learned Friend discourage the use of the new 50p. piece because of the possible confusion with the 10p. piece?

Mr. Taverne: Certainly I will not, However, that is a different question.

Earl of Dalkeith: Is it not asking for trouble to produce new decimal coins of almost identical size and weight, as in the case of the new 50p. and 10p. coins? Will the hon. and learned Gentleman look urgently at some means of producing an alternative coin which is larger or a paper note to take the place of the new 50p. coin?

Mr. Taverne: I realise the hon. Gentleman's concern, but he will have noticed that the new 50p. coin is of a different shape.

Import Deposits Scheme and Travel Allowance

The following Questions stood upon the Order Paper:

Mr. GOODHEW: To ask the Chancellor of the Exchequer if he will make a statement on the future of the import deposits scheme.

Mr. HUNT: To ask the Chancellor of the Exchequer if he will now announce the amount of the foreign travel allowance for the 12 months beginning 1st November, 1969.

Mr. BLAKER: To ask the Chancellor of the Exchequer (1) if he will now announce the limit on spending on foreign travel outside the sterling area for the forthcoming tourist year;
(2) if he will now make a statement on the future of the arrangements for import deposits.

Mr. DICKENS: To ask the Chancellor of the Exchequer what is his policy regarding the future of the import deposits scheme.

Mr. Speaker: Mr. Goodhew.

Mr. Goodhew: Question No. 13.

Mr. Diamond: With permission, my right hon. Friend will answer this Question together with Questions Nos. 14, 28, 29 and 40 at the end of Question Time.

Mr. Higgins: On a point of order. Do I understand the Chief Secretary correctly? Does the Chancellor of the Exchequer propose to answer Questions both with regard to the foreign travel


allowance and with regard to import deposits at the end of Question Time These are quite separate issues, and I would have thought that many of my hon. Friends might like to raise separate points on them?

Mr. Speaker: Order. When the Minister makes his statement, hon. Members will have an opportunity to ask supplementary questions connected with their own original Questions.

Mr. Arthur Lewis: On a point of order, Mr. Speaker. In view of the fact that full details have been given already in the Press, need we have a statement at all?

Mr. Hunt: Further to that point of order, Mr. Speaker. If you will not accept the point of order raised by my hon. Friend the Member for Worthing (Mr. Higgins), may I raise a point? How is it possible to connect the import deposits scheme with the foreign travel allowance? Is it because the Chancellor of the Exchequer is unable to be here at the moment?

Mr. Speaker: Order. A Minister can answer Questions in whatever way he likes. Points of Order in Question Time cost some hon. Member a Question.

Mr. Maudling: But surely the Minister must ask permission to link Questions together. Can this be done by linking them with a statement?

Mr. Speaker: Order. It is a matter of courtesy for a Minister to ask to link Questions, but he may link them, in any case.

Income Tax (Nurses' Meal Allowance)

Mr. Hunt: asked the Chancellor of the Exchequer to what extent the recently-agreed nurses' special meal allowance of £48 a year will be subject to tax.

Mr. Taverne: This allowance is taxable like the rest of the earnings of nurses and other people.

Mr. Hunt: Is the hon. and learned Gentleman not rather ashamed of that mean and miserly attitude? Why cannot a nurse's meal allowance be treated in the same way as an office worker's luncheon voucher for tax liability?

Mr. Taverne: There are two separate questions. One is that of nurses' pay. The second is whether cash allowances of different kinds should be taxable. In some ways, luncheon vouchers are an historical anomaly, though cash allowances to nurses and others have always been regarded as taxable, and this must be the general tax rule.

Mr. Arthur Lewis: May I take up that last point? Do all people who get meal allowances or cash allowances pay tax? When civil servants get their "out" allowances—and, for that matter, the chairmen of the nationalised boards—do they pay tax? My hon. and learned Friend said that all pay tax.

Mr. Taverne: Every cash allowance is taxable unless it is in respect of extra expenses which have to be incurred beyond normal expenses.

Sir G. Nabarro: Is it not the fact that a worker's luncheon voucher is evaluated by the Inland Revenue at 3s. per working diem—that is, 15s. a week, or £39 per annum—and has always been tax-free? Could not the Treasury overcome the difficulty by issuing luncheon vouchers to nurses, and then there would be no excuse for taxing them?

Mr. Taverne: It is true that the luncheon voucher is in a separate category and is, to some extent, an historical anomaly which has been strictly restricted. For cash allowances, a different rule prevails, and the allowance is normally larger than the amount of any luncheon voucher.

Sir G. Nabarro: On a point of Order, Mr. Speaker. In view of the highly unsatisfactory nature of that reply, I beg to give notice that I will seek to raise the matter on the Adjournment.

Government Stock (Issue)

Mr. Biffen: asked the Chancellor of the Exchequer what proposals he has to issue a further Government stock involving borrowing for 25 years at 9 per cent. annual interest.

Mr. Taverne: My right hon. Friend has no such proposals. Hon. Members will have seen that the latest issue of long-dated stock was at 8¾ per cent.

Mr. Biffen: The hon. and learned Gentleman must know that the 8¾ per


cent. stock was issued at 96 and is now on a running yield of over 9 per cent.? Is it not absurd to be refinancing maturing debt at these fancy rates of interest over such a long period of time?

Mr. Taverne: I am sure that the hon. Gentleman would be one of the first to appreciate that in the case of any issue of Government stock, it must be issued at the going rate. That is why this stock was issued at 8¾.

Exchange Control Legislation (Contravention)

Mr. Hugh Jenkins: asked the Chancellor of the Exchequer to what extent Swiss banks are conniving in contravention of British exchange control legislation by accepting illegal exports of gaming club profits; and if he will take urgent steps to stop this activity.

Mr. Taverne: Certain investigations are proceeding, and I cannot anticipate their outcome.

Mr. Jenkins: Is my hon. Friend aware that, according to a report in the Sunday Telegraph, the sum of £20 million a year is reported by Scotland Yard to be drained away by Swiss banks which are illegally investing in British gaming clubs? This is a dividend upon illegal investment. Will the Minister cause his investigations to come to a speedy conclusion and take steps to stop this gambling?

Mr. Taverne: I am not sure that my hon. Friend has accurately summarised the article in the Sunday Telegraph, which I have read. But certainly I agree that this matter requires investigation, and it is being investigated.

Selective Employment Tax

Mr. Boyd-Carpenter: asked the Chancellor of the Exchequer what arrangements he has now made to speed up repayments of selective employment tax to persons not liable to the tax; what is now the average interval between payment and repayment; and whether this period is the same for public authorities and private citizens.

Mr. Taverne: Most claims for refund are paid within about two weeks of receipt. Claims for private taxpayers are on a quarterly basis, but in the case of public bodies where the number of claims

to be dealt with is small by comparison, payments are made more frequently.

Mr. Boyd-Carpenter: As levying this tax on those not liable to it involves an interest-free loan to the Exchequer, will the hon. Gentleman say what justification there is for treating public authorities more favourably than private citizens?

Mr. Taverne: The reason why public authorities are treated more favourably is because in their case there is one single claim covering a large number of people which can be administratively dealt with in this way.
Concerning the interest-free loan, I agree with the right hon. Gentleman that the process of collection and repayment is cumbersome, but that will end when the National Insurance stamp is abolished.
The right hon. Gentleman will also remember that if there was not this interest-free loan, £13½ million extra would have to be raised by the tax, which would put up the rate by another shilling

Mr. Will Owen: asked the Chancellor of the Exchequer when he now expects to receive and lay before the House the report on selective employment tax by Professor Reddaway; and whether he will make a statement.

Mr. Diamond: It is expected that Professor Reddaway's initial findings will be available before the end of the year. They will be published and my right hon. Friend will give very careful consideration to his findings.

Export and Shipbuilding Finance

Mr. Ridley: asked the Chancellor of the Exchequer by what authority he requires the joint stock banks to offer specially favourable loans for export credit and for shipbuilding.

Mr. Taverne: The arrangements for fixed rate lending under the special schemes for export and shipbuilding finance were agreed between the Bank of England and the banks concerned. The question of authority does not therefore arise.

Mr. Ridley: If the Government want to subsidise these two activities, will they please pay for them instead of asking the customers of the banks to pay for them


as a result of a piece of dirty arm-twisting in the background?

Mr. Taverne: I am not sure that "dirty arm-twisting" is the right way to describe this scheme, which I should think the whole House would welcome, because it provides assurances to exporters and shipbuilders that they are free from the short-term variations in rates.

Mr. Emery: Is the Minister saying that it was not the suggestion of the Treasury that these special rates of interest should be provided? Is not this a case of further Treasury interference with the ordinary financial structure of interest rates?

Mr. Taverne: Of course the Government wish to see this, and we are extremely grateful to the banks for cooperating as they have. But, because of the refinancing facilities made available by the Bank of England, we and the banks can be sure that the growth of fixed rate finance does not constrain their lending in other forms.

Banks (Foreign Exchange Dealings)

Mr. Hugh Jenkins: asked the Chancellor of the Exchequer whether he will name the banks which have been officially reprimanded for irregularies in foreign exchange dealings.

Mr. Diamond: No, Sir. The inquiries which were made revealed irregularities by a small number of banks, each of which has given an assurance that these will not recur. My right hon. Friend does not propose to take any further action in respect of these particular irregularities but this area of foreign exchange operations is being kept under close scrutiny.

Mr. Jenkins: Why should banks be immune from the general proposition that offenders should be named—pour encourager les autres? Is it not the case that these banks were holding foreign currency reserves which they should not have held and which should have been handed over to the United Kingdom foreign currency reserves? By this debt have they not been weakening sterling, and would not sterling be stronger than it is if they had acted properly? Will the Minister make certain that there is no further cause for offence?

Mr. Diamond: On the latter part of the question, yes. As I have indicated, we are taking special steps to keep this area under constant review.
On the first part of the question, these irregularities arose out of slackness of control which resulted in either an excess amount or too small an amount of foreign currency being held.

P.A.Y.E. Tax Arrangements (Centralisation)

Mr. Mapp: asked the Chancellor of the Exchequer if he will defer his arrangements for centralising Pay As You Earn income tax arrangements until he is able to ensure to Pay As You Earn taxpayers the present facilities available by local tax officers for consultation and solution of tax inquiries.

Mr. Taverne: Under the centralisation programme local tax officers will continue to be available to assist P.A.Y.E. taxpayers.

Mr. Mapp: Is the Minister aware that to assist is one thing and to solve is another? What will happen will be that the P.A.Y.E. taxpayer, who usually cannot get away from his business, will have to make two visits with the delay of a week or so, and the other form of taxpayer will be able to get an interview and solve his problems there and then. Why the differentiation in these cases?

Mr. Taverne: If the P.A.Y.E. taxpayer can give a few days' notice of his request all his problems can be dealt with. If it is an urgent matter, no doubt the local tax office can get in touch with the computer centre and obtain the necessary information.
In general, there is no doubt that the computer programme will ease the administration of the Inland Revenue at a time when delays in the Inland Revenue can only inconvenience the taxpayer.

Value-added Tax

Mr. William Hamilton: asked the Chancellor of the Exchequer what further consideration he has given to the introduction of a value-added tax; and with which organisations he has had discussions on the matter.

Mr. Diamond: My right hon. Friend keeps the whole tax system, including the


possibility of changes like the introduction of value-added tax, under continuous review.

Mr. Hamilton: Can my right hon. Friend say how many additional civil servants will be needed to introduce this tax? Has any assessment been made of the effects of the tax proposed by the right hon. Member for Enfield, West (Mr. Iain Macleod) on the cost of living, because this problem very much exercises the minds of ordinary people?

Mr. Diamond: The number of civil servants engaged will depend a great deal on the form and coverage of the tax. The cost of administration would be much greater than for purchase tax and selective employment tax.
On the latter part of the question, I do not think that I am responsible for giving that kind of information.

Mr. Maudling: Is not the introduction of the value-added tax a necessary consequence of joining the Common Market?

Mr. Diamond: The right hon. Gentleman will be aware of recent developments in the Common Market.

Mr. Dickens: asked the Chancellor of the Exchequer what discussions he has had with the National Economic Development Council on the introduction of a value-added tax.

Mr. Diamond: The report of the Committee set up by the National Economic Development Council to examine value-added taxation was discussed at the Council's meeting in November, 1968, which my right hon. Friend attended.

Mr. Dickens: Will my right hon. Friend bear in mind the very strong representations made by the T.U.C. about the effect of a value-added tax on the lower paid, and that the tax is regressive? Will he also bear in mind the calculation made by N.E.D.C. that to implement the tax would require between 6,000 and 8,000 additional civil servants apart from the substantial number of people who would be employed in this work in private industry as well?

Mr. Diamond: My right hon. Friend will bear in mind the nature of the tax and the administrative difficulties associated with implementing it.

Capital Gains

Mr. Barnett: asked the Chancellor of the Exchequer (1) what instructions he has given to the Inland Revenue on discretion to be used in allowing taxpayers the choice of alternatives open to them in opting for one or other method of calculating capital gains;
(2) by what authority Her Majesty's inspectors of taxes require a taxpayer formally to elect one method of calculation of a capital gain, when the inspector proposes to prove that such method would be less advantageous to the taxpayer; and if he will make a statement.

Mr. Taverne: A taxpayer who has a statutory option is free to exercise it or not, as he thinks best. It is for him to decide. Inspectors of Taxes cannot and do not require taxpayers to opt for one method rather than another.

Mr. Barnett: On the choice of either the apportionment basis or the value at April, 1965, is not the Inland Revenue being somewhat bloody-minded in insisting that the taxpayer makes a choice? Should he not be allowed the opportunity to make the formal choice after agreement with the inspector of taxes on the fairest method for the taxpayer concerned?

Mr. Taverne: In principle, obviously the 1965 valuation would be right. It is to solve the difficult questions of valuation and the enormous administrative complexities involved that the time apportionment basis was provided with the option for 1965 as an alternative. If this option was revocable, precisely the same valuation difficulties and administrative complexities would again arise.

United States Secretary of the Treasury and International Monetary Fund (Meetings)

Mr. Bruce-Gardyne: asked the Chancellor of the Exchequer if he will make a statement on the outcome of his recent meetings with the United States Secretary of the Treasury and the management of the International Monetary Fund.

The Chancellor of the Exchequer (Mr. Roy Jenkins): These meetings took place


as part of a process of periodic and informal exchanges of view. They were not designed to have a specific outcome.

Mr. Bruce-Gardyne: Did the Chancellor discuss with the Managing Director of the International Monetary Fund his publicly expressed view, of which the Chief Secretary is apparently ignorant, that the demand management of the British economy in the months ahead will have to be more severe than the state of the economy necessitates because of the accumulation of short-term debts by the Government? What is the Chancellor's view on Mr. Schweitzer's opinion?

Mr. Roy Jenkins: I did not discuss this matter, and I am not quite sure to what the hon. Gentleman is referring.

Local Authorities (Foreign Currency Borrowings)

Mr. Silvester: asked the Chancellor of the Exchequer how many local authorities have borrowed foreign currency at long-and medium-term since April, 1969; and what steps his Department is taking to encourage this development.

Mr. Diamond: One, Sir. Section 14 of the Finance Act, 1969, enabled local authorities to pay interest without deduction of tax on foreign currency borrowing, and we are prepared in suitable cases to provide relief for the exchange uncertainties involved but the terms and timing of such borrowings must have regard to conditions in the markets concerned and other demands on those markets.

Mr. Silvester: Is it not the case that during the debate on the Budget Resolutions the then Financial Secretary said that he would encourage local authorities to do this? Is the Chief Secretary aware that the Treasury has been particularly unhelpful to some local authorities, particularly my own?

Mr. Diamond: I am aware of the circumstances affecting the hon. Member's local authority, but the answer is as I have already given it to him, namely, that those demands, and other demands, have to be regulated, and note has to be taken of the condition of the market.

Mr. Maxwell: Will my right hon. Friend tell the House whether the restric-

tions imposed by the Treasury on local authority borrowing overseas has anything to do with the advice tendered to the Bank of England and the Treasury by merchant banks which are attempting to regulate themselves so as to prevent so many local authorities from getting into the queue for borrowing?

Mr. Diamond: We have our information, and we take such advice as is necessary to ascertain the state of the market and the likely demands upon it.

Income Tax (Allowances)

Mr. Frank Allaun: asked the Chancellor of the Exchequer what estimate he has made of the cost to the Exchequer of raising all personal income tax allowances by £100, £200 and £300 a year, respectively; and of the cost of restricting these increases to those earning under £30 a week.

Mr. Taverne: The cost of the suggested increases in the single and married allowances and the maximum wife's earned income allowance is estimated at £870 million, £1,600 million and £2,200 million, respectively, for a full year. I am not sure precisely what my hon. Friend has in mind in the second part of his Question, but there would be practical and other difficulties involved, and the costs would be in the region of two-thirds of the figures I have given.

Mr. Allaun: Does my hon. and learned Friend agree that it would be far fairer to those on low incomes to increase personal allowances rather than to reduce income tax by 6d. or some other amount in the £?

Mr. Taverne: I think that my hon. Friend has received a letter from my right hon. Friend saying that this is one of the many considerations which he will bear in mind.

Oral Answers to Questions — PUBLIC BUILDING AND WORKS

Mr. Shinwell: Would not it be preferable and more satisfying to the general public to have an independent analysis, instead of one that I suppose will be provided by the Foreign Office, which has made up its mind about this?

The Prime Minister: Perhaps I should not be far out of order if I began my answer by congratulating my right hon. Friend about the events of last Saturday, that I heard of too late to take up. As for his Question, having heard many questions and speeches, and having read many articles and written some articles and made some speeches, I am not sure what an independent analysis of this question, as indicated by my right hon. Friend, would exactly produce, but in fact all the relevant Departments and not just the Foreign Office are involved in this analysis. It is principally a matter for the economic Departments.

Mr. Heath: Can the Prime Minister say whether the analysis is being done on the basis that Britain alone becomes an additional member of the Community or that two other E.F.T.A. countries and Eire become members, and others become associate members of the Community? This would have a major impact on the price levels of the common agricultural policy.

The Prime Minister: I very much agree with the right hon. Gentleman. The study is being made on a number of alternative assumptions. Certainly the one that he has in mind is one of those assumptions. If Denmark, for instance, were to become a full member it would have a great effect on the supply side. Further, as Britain is a big consumer, this would obviously affect the consumption side.

Mr. Orme: When the figures are available will my right hon. Friend allow a debate in the House on the current situation in regard to the Common Market, particularly following the widespread concern shown at all the party conferences this year and by the public in general, so that we may have a reassessment of the figures that he is so often proud to quote and quoted in the last debate we had in this House on our possible entry into the Common Market?

The Prime Minister: The question of a debate is a matter of discussion through the usual channels. As to what was said

at the various conferences on the South Coast recently, my impression of the one that I attended and—if I have been correctly informed by reading Press reports—of the others, is that no one has seriously questioned whether Britain should continue with her application. That was not seriously questioned at our own Conference; indeed, an amendment to that effect was not even pressed to a Division. The real concern expressed at our Conference, and I believe at others, was the terms which the Government might put forward to this House for entry. This is a matter that can be ascertained only by negotiations.

Mr. George Brown: Having considered it and having delivered to the House his view about the cost of going in, will my right hon. Friend the Prime Minister also ensure that the House is made fully aware of the cost of staying out and the jobs that may be lost if we stay out?

The Prime Minister: My right hon. Friend will be aware that that was one point that I covered in my speech in Brighton, and it was covered at greater length by my right hon. Friend when dealing with this specific situation at that Conference. He will also recognise the great difficulty of quantifying assumptions of that kind. But certainly there will be a cost to Britain of going in to set against the undoubted gains from going in, and also a cost if Britain is not able to get in.

Sir G. Nabarro: Will the Prime Minister realise that there is widespread apprehension among the general public about the alleged alarming price rise in the cost of food if Britain joins the Common Market? Will he bear in mind that apprehensions cannot be allayed by departmental officials producing a report? Would it not be advisable to allow Members penetratingly to question officials as to how they have arrived at their conclusions about comparative retail food prices, in order to allay anxieties of the housewife?

The Prime Minister: I have no doubt that in any debate that supervened after the publication of these figures the hon. Member would make his usual penetrating comments thereon. Whether he made them at Brighton recently I was not informed. As for the cost of living, this is obviously one thing which must be examined. But he gives his more or less


loyal support to a party which is committed to this increase in the cost of living even if we do not get into the Common Market.

Caernarvon Castle (Son et Lumière)

Mr. Gwilym Roberts: asked the Minister of Public Building and Works if, in order to promote tourism in North Wales, he will introduce at Caernarvon Castle Son et Ltonière entertainments based on Welsh history.

The Minister of Public Building and Works (Mr. John Silkin): A Son et Lumière was held at Caernarvon Castle every evening from 14th July to 27th September this year. The entertainment related to the history of the castle and, more generally, of Wales.

Mr. Roberts: I was aware of the entertainment that had been provided there, but would not my right hon. Friend agree that it would be a good idea to extend it to other Welsh castles in the area? This would provide an enormous tourist attraction, bounded on the one side by the mountains of Snowdonia and on the other by the coast of Anglesey?

Mr. Silkin: A Son et Lumière was also held at Rhuddlan Castle, sponsored by the Daily Express and organised by a local committee.

Mr. Thorpe: Although the Minister is not prepared to move on this front, is there any reason why the regalia used for the Investiture should be kept in England and not in Wales where it rightly belongs?

Mr. Silkin: I do not think that that arises out of a question on Son et Lumière.

Thaumatomia Notata

Sir D. Walker-Smith: asked the Minister of Public Building and Works whether he is aware of the recurrent nuisance annually in September to householders from incursions of swarming yellow flies, Thaumatomia Notata; and, having regard to the fact that these pests originate from water, whether he will take preventive measures in regard to the lakes and ponds in the Royal Parks to abate this nuisance.

Mr. John Silkin: I have been advised by the British Museum (Natural History) that all the available evidence suggests that this species of fly does not originate from water.

Sir D. Walker-Smith: If it does not originate from water, whence does it originate? From wherever it originates, will the Minister kindly take preventive measures, as requested?

Mr. Silkin: The question where it originated is a matter for the followers

of Charles Darwin, and not for my Department, but I am told that in any event the flies are quite harmless and may easily be killed, if so desired, by insecticidal sprays and the bodies swept up or removed with a vacuum cleaner.

DUTCH PRIME MINISTER (VISIT)

Mr. Marten: asked the Prime Minister if he will invite the Dutch Prime Minister to visit him for talks on matters of mutual interest.

The Prime Minister (Mr. Harold Wilson): I have no plans to do so at present.

Mr. Marten: When the meeting takes place, will the Prime Minister discuss with him the remarks of Dr. Luns, the Dutch Foreign Minister, that unless Britain gives a firm pledge to a federal Europe our application will not have the wholehearted support of the Dutch Government? In view of the E.E.C. Report of 1st October which pleads for an elected Parliament with budgetary powers, surely the movement for federalism is afoot, either inside or outside the Treaty of Rome? If we were members of the Common Market, and this went further, would the Prime Minister say "Yes" or "No" to such a federal movement?

The Prime Minister: If I were to meet the Dutch Prime Minister, all relevant matters would be considered. As regards the question of federalism, I have answered this a number of times in the House, and still more recently on the South Coast.

Mr. John Mendelson: Has my right hon. Friend seen the reference in that E.E.C. Report to the publicly-owned British steel industry? Does not my right hon. Friend agree that this matter was raised in the Select Committee on Nationalised Industries, and that the Government then gave an assurance that under no circumstances would the publicly-owned steel industry be broken up again? Will my right hon. Friend reaffirm that to the House this afternoon?

The Prime Minister: Yes, Sir. We have taken our own decision about steel. I do not accept that the present situation of the steel industry in Britain has any bearing on this matter.

NIGERIA

Mr. Edward M. Taylor: asked the Prime Minister if he will make an official visit to Nigeria.

The Prime Minister: I have no plans at present for a further visit. We are, however, in close contact with the Emperor of Ethiopia and other members of the O.A.U. who are active in promoting negotiations on a settlement and I had a useful discussion on this matter with the Ethiopian Foreign Minister last week.

Mr. Taylor: In the meantime what steps is the Prime Minister taking to ascertain accurately the extent of suffering and hunger in Biafra? In view of the completely alarming reports, has the Prime Minister put a proposition to the Soviet Union and to France about a possible international arms embargo, and if so what reply has he had?

The Prime Minister: I have nothing to add on the question of an arms embargo beyond the whole series of answers that I have given in the House, and what has been said in successive debates. With regard to the problem of famine and relief supplies, which again we have debated at great length, I think that the hon. Gentleman will have studied the accounts of the recent negotiations between the International Red Cross and, on the one hand, the Federal Government and, on the other, Colonel Ojukwu. I think that the hon. Gentleman will have concluded that whatever the residual problem of food shortage, it could be dealt with immediately by Colonel Ojukwu accepting the proposal of the Red Cross for daylight flights.

Sir Alec Douglas-Home: But since the Prime Minister answered Questions towards the end of July and there was a debate, the Foreign Secretary has been at the United Nations. Did he not take the occasion, on behalf of the Government, to raise the question of an arms embargo with the Soviet Union and other Governments?

The Prime Minister: No, Sir, but we had informal consultations about whether such a proposal would make progress in the United Nations, and it was our clear view that it would not. We have always expressed the view—and I think that the right hon. Gentleman accepts this—that

the only way to get an effective arms embargo is on the ground, and this requires a cease-fire.

Mr. John Lee: Whatever Colonel Ojukwu's limitations, are we to understand that this country will go on sending arms to Nigeria however long this civil war goes on?

The Prime Minister: I will not repeat what has been said on this question on many occasions from this Box about our obligations in this matter and the effect that we have been able to exercise in certain matters on which concern was expressed in the House, not least last March, as a result of our close relationship with the Nigerian Government.

EUROPEAN ECONOMIC COMMUNITY

Sir D. Walker-Smith: asked the Prime Minister when the economic analysis of the effects of British entry to the European Economic Community on the terms of the Treaty of Rome will be made available to Parliament; and whether he will institute procedures whereby hon. Members may seek elucidation by interrogation of those charged with the duty of producing the analysis.

The Prime Minister: I have nothing to add to what I said in reply to the right hon. Gentleman the Leader of the Opposition and other hon. Members on 6th October.—[Vol. 788, c. 601–5.]

Sir D. Walker-Smith: Does not the Prime Minister appreciate that that does not answer the second part of my Question? Does he agree that since the Foreign Secretary has warned us that this analysis will produce figures that may be qualified and imprecise there should be made available to hon. Members some opportunities beyond the catch-as-catchcan of Question Time for some steady and sustained processes of cross-examination?

The Prime Minister: I do not accept the right hon. and learned Gentleman's description of Question Time. His Question referred to "those charged with the duty of producing the analysis." Those charged with the duty of producing the analysis are Her Majesty's Ministers, and they are subject to questioning by this House.

Oral Answers to Questions — EAST-WEST TRADE

Mr. Will Owen: asked the Prime Minister if he will set up an interdepartmental inquiry into the varying trade agreements with nations in the European Eastern zone with the object of normalising trade relations and reaping the advantages of expansion in this market; and whether he will make a statement.

The Prime Minister: No, Sir. Our trade arrangements with countries in Eastern Europe provide a good framework for the development of trade with these countries and they are kept under review from year to year.

Mr. Owen: My right hon. Friend, by long experience, knows the problems and the vital importance of East-West trade. Is he aware that, with scientific and technical progress, forward planning is vital? Is he further aware of the approach of the German Democratic Republic for a long-term trade agreement, and that such an agreement would be of considerable advantage to the export trades of these countries? May I have his encouraging support for developments in this field?

The Prime Minister: My hon. Friend will have been gratified to see that f.o.b. exports from Britain to countries in Eastern Europe, including East Germany and the Soviet Union, have increased from £99 million in 1964 to £223 million in 1968. He will also be aware of the arrangements that I made with Premier Kosygin when he was in this country for linking trade negotiations with the forward five-year production and demand plans of the Soviet Union. As for East Germany, my hon. Friend will be aware of the special difficulties which arise here, due to the fact that East Germany is not recognised by us as an independent country. He will also know the arrangements made over a period of years by successive Governments for trade relations between British industry and East Germany which seem to be working quite satisfactorily.

Mr. Heath: Would not the Prime Minister also agree that with the welcome

increase in exports there has also been a disportionate increase in imports into this country from the Eastern bloc, which has enabled the Eastern bloc to maintain its long-held ratio between imports and exports, and whereas other European countries have balanced them with us the Eastern bloc countries have never done so? Will he keep up his pressure to ensure that these countries import what they need, such as capital equipment, from us?

The Prime Minister: The right hon. Gentleman will remember, from his own experience as President of the Board of Trade—I remember this being argued with them 20 years ago—that they have always pressed for a surplus in direct trade because of their large purchases from the sterling area. We have never fully accepted this argument. The right hon. Gentleman will know that over the last two years there has been some substantial redress in the balances on the bilateral accounts between the Soviet Union and Britain.

Mr. Moonman: Does my right hon. Friend agree that on the whole the technical agreement between Britain and the Comecon countries works well? In order to make it even more effective, would not he consider a proposal to simulate the practice followed by the French Government in setting up joint committees between industry and Government in those countries associated with the technical agreement?

The Prime Minister: My hon. Friend will know of the detailed arrangements made following my talks with Chairman Kosygin in 1967, leading to regular visits, both by the Minister of Technology, to discuss not only engineering exports but scientific and technological co-operation, and by my right hon. Friend the President of the Board of Trade. We have been considering with the Soviet Government whether this should be further institutionalised, but they are working extremely well.

Oral Answers to Questions — EXPORTS

Mr. Gwilym Roberts: asked the Prime Minister if he is now satisfied with arrangements for the co-ordination between Ministers concerned with the


export drive; what steps he is taking to improve this co-ordination in order to obtain a further increase in exports; and if he will make a statement.

Mr. Molloy: asked the Prime Minister if he is satisfied with the degree of co-ordination of those Departments concerned with exports; and if he will make a statement.

The Prime Minister: My right hon. Friends already work closely together on these matters, but as I informed the House on 13th October, I have asked my right hon. Friend the President of the Board of Trade to devote his attention particularly to the promotion of exports.—[Vol. 788, c. 32.]

Mr. Roberts: Would my right hon. Friend consider closer co-ordination of the Foreign Office to ensure, for example, that commercial counsellors stay long enough in a country to make more impact on our trade?

The Prime Minister: I think that my hon. Friend will be aware of the very big improvements which have been carried out over the past few years by the Foreign Office in respect of the Commercial Diplomatic Service. He will also know of the proposal in the Duncan Report, following its review of the Diplomatic Service, which proposed a still further concentration on the work of exports within Foreign Office posts abroad. This, of course, Her Majesty's Government fully welcome and intend to implement.

Oral Answers to Questions — QUESTIONS TO MINISTERS

Mr. Marten: On a point of order. I would have raised this during Question Time, Mr. Speaker, but I did not wish to take up time then. When I asked the Prime Minister a direct question about federalism in Europe, he referred, without answering my Question, to speeches made on the South Coast. As he forgot to ask me to his party conference, is it right for answers to be given in the House which refer to conferences at which we were not present?

Mr. Speaker: I am grateful to the hon. Member for raising his point of order at the end of Questions, since raising points of order during Questions

prevents someone from getting to his Question. However, there is no point of order in this for me.

Mr. Blaker: On a point of order. I delayed raising my point of order for the same reason as my hon. Friend the Member for Banbury (Mr. Marten), but it is a different point.
I understand that the Chancellor of the Exchequer, in the statement that he is about to make, intends to answer five separate Questions together, with permission. Two are in my name and deal with totally different and distinct matters. I suspect that, if I had attempted to put them in one Question, the Table Office would have ruled it out of order.
It appears to me that it cannot be for the convenience of the House, nor for that of many people in the country who are interested in these two very important Questions, that this course should be adopted. My point of order is to ask whether it is possible for the House, in a flagrant case of this kind, to refuse permission.

Mr. Speaker: The Chair has enough worries without interfering with the kind of replies which Ministers give to Questions. Ministers may, from time to time, group Questions. They ask permission of the House, but that is a matter of form; permission is always given. When the hon. Member puts his supplementary question, he should be able to manage to satisfy himself.

IMPORT DEPOSITS AND TRAVEL ALLOWANCE

The Chancellor of the Exchequer (Mr. Roy Jenkins): With permission, I will now answer Questions Nos. 13, 14, 28, 29 and 40, relating to the import deposit scheme and the travel allowance.
We have seen in recent months a very considerable improvement in our economic strength. As a result of the measures taken since November, 1967, the balance of payments passed into surplus in the early months of this year, and the surplus has since grown fairly steadily. Until the end of the second quarter, the main factor in this turn-round was the very healthy state of the invisible account, but in recent months the visible account has also passed into surplus. We have reason,


therefore, for cautious optimism about our progress towards our economic objectives, and, in particular, towards the objectives of a £300 million surplus by April next year.
But this does not mean the time has come to relax. I have always emphasised that recovery would take at least two years, and that even then it will be necessary to ensure that it is maintained. Nevertheless, the recent run of better figures has naturally been an important factor in considering whether the import deposit scheme should be allowed to lapse when the present Act runs out on 4th December.
There is no way of quantifying the precise effect of import deposits. But there can be no doubt that the scheme has had a useful restraining effect on imports, as well as reinforcing control over domestic credit. Our trading partners, particularly in E.F.T.A. and the Irish Republic, have been most understanding in their acceptance of the scheme, though, of course, I fully understand their dislike for it and their wish that it should be brought to an end as soon as our position allows.
Our greater strength means that we can now tolerate some abatement of the scheme. But it would be foolish to reverse our policies so soon after moving into substantial surplus. The Government have, therefore, decided that the right course is to take powers to continue the scheme covering the same range of imports for a further 12 months from 5th December, 1969, but for the rate of deposit to be reduced from 50 to 40 per cent. The period of deposit—180 days—will remain unchanged.
The travel allowance has to be considered against the same background. Much as I should like to remove the restrictions, I am satisfied that they save significant sums in foreign exchange and that it would be premature to remove them now. The restrictions on foreign currency expenditure for travel—and on cash gifts—to the non-sterling area will, therefore, remain unaltered for the time being.
I shall keep the matter under continuous review, and hope to be able to abolish the restrictions before long. But it would be wrong to do so until it is quite clear that the improvement in our balance of payments is a secure one which

we have a good prospect of maintaining. That is the end to which our policies over the last two years have been directed, and I do not intend to change them just as they are showing unmistakeable signs of success.

Mr. Goodhew: Is the right hon. Gentleman aware that, on the import deposits scheme, this statement is thoroughly unsatisfactory, even from this dishonest Government? May I remind him, that, on Friday, 22nd November, 1968, when announcing this measure, he told the House that the Bill would run for a year and that that period could be reduced but not increased by Statutory Instrument? How does he expect businessmen in this country to be able to manage when they are misled by such a dishonest Administration? Would it not be better to resign now?

Mr. Jenkins: Hearing the hon. Gentleman speaks always reminds me of the foolishness of weak men trying to use strong words. I made it clear that the scheme could not be renewed except by legislation. That is the position. There will be legislation.

Mr. Goodhew: Thoroughly misleading and dishonest.

Mr. Hunt: With regard to the foreign travel allowance, is the right hon. Gentleman aware that we deplore the fact that, once again, he has refused to recognise the strength of the arguments advanced on this side against this petty and pointless restriction? Is he aware that this restriction is being evaded on a very wide scale and is subjecting British tourists abroad to great humiliation? Why cannot it be scrapped?

Mr. Jenkins: No, Sir, I think that that is exaggerated, though I recognise considerable objections to the scheme in principle. I also note, if the hon. Gentleman wants a precedent, that Lord Butler was very slow to relax the travel allowance restriction after we moved into surplus in 1952 and 1953. I hope to move a little more quickly, but not prematurely.

Mr. Blaker: I will, with permission, put both my supplementaries together. First, does the Chancellor think that his statement will increase confidence in the pound sterling? Second, the Chancellor will be aware that the articles of the International Monetary Fund require that


there shall be no restriction of payment for current transactions without the approval of the fund. Has he obtained that approval for his proposal for the coming year?

Mr. Jenkins: Yes. I indicated to the I.M.F., to Mr. Schweitzer, in my talks to him, the way in which my mind was moving and he raised no objections and was understanding of the position.
Answering the first part of the question, I think that all those who are concerned with the long-term health of the pound and the strength of our balance of payments will be pleased to see that we meant what we said when we said that there would be no premature relaxation.

Mr. Dickens: Does the Chancellor recall that three years ago, in the autumn of 1966, the Government removed the import surcharge and that this was followed by a massive upsurge in imports in the first part of 1967? Is he aware that, consequently, he and the Government are warmly to be congratulated on their wise and sensible decision to retain the import deposit scheme for a further period?

Mr. Jenkins: I take note of those somewhat unexpectedly warm tributes.

Mr. Maudling: Does the Chancellor recognise that his statement will be received with a certain amount of disappointment after the euphoria of the last week or two? May I ask him two questions? First, does he want the world to measure the improvement in the balance of payments by the fact that a temporary scheme designed for 12 months is to be continued at 40 per cent. rather than 50 per cent.?
Secondly, dealing with the foreign exchange restrictions, can he explain in present circumstances the logic of saying to the British citizen, "You can buy all the French products you want in London, but not in Paris"?

Mr. Jenkins: The logic of what the right hon. Gentleman suggests would be to put on import quotas, which I do not think he would advocate. That would be the case if one were to take a more restrictive view of the position. It has been the case under successive Governments that, logical or not, they have

applied travel restrictions rather than import restrictions on goods.
Answering the first part of the right hon. Gentleman's question, I hope and believe that the world will measure the strength of our position by the balance of payments position, which has become strong and which I have every intention of keeping strong.

Mr. George Brown: Will the Chancellor please explain to the House what he thinks he is saving for the balance of payments by keeping on the £50 travel allowance restriction? Will he please look at what any of us who travel abroad see—that people are still spending, and, in fact, spending far more than the £50 allowance can allow them to spend? Would it not therefore be better to take away from the Germans, the French and the rest of our continental friends the argument that we are too poor to remove the restriction when we know that so many of our people are spending far more than the £50 allowance?

Mr. Jenkins: I take note of what my right hon. Friend says, but it is still my view that there is some substantial saving here. [HON. MEMBERS: "How much?"] If I had to make an estimate it would be of the order of £25 million a year. As soon as it is practicable and safe to do so, I want to see this restriction removed, but I want even more that it should be done within the framework of a continually healthy balance of payments.

Mr. Geoffrey Lloyd: Will the Chancellor explain the logic of a policy which allows anyone who can afford it to spend £10,000 worth of foreign exchange on anything he likes, who can afford, for example, to import a luxury foreign motor car or dresses for his wife or girl friend from Paris, whereas he must be careful not to spend more than £100 to get there and back?

Mr. Jenkins: That is precisely the question, although in slightly more flamboyant language, which the right hon. Member for Barnet (Mr. Maudling) put as the second part of his supplementary question. Perhaps the right hon. Gentleman did not hear his right hon. Friend. I endeavoured to reply to his right hon. Friend the Member for Barnet and I can add nothing further.

Mr. Sheldon: While accepting the need to maintain the import deposits scheme because of its small but useful effect on restraining imports, may I ask my right hon. Friend whether he is aware that there was a hope in the world of industry that there would be some easing of the credit squeeze by the ending of the scheme? Can he say in what alternative ways he intends to ease the credit squeeze?

Mr. Jenkins: The reduction to 40 per cent. in itself constitutes a slight relaxation of the credit squeeze, although it may not be in accordance with the expectations of those who thought that the scheme would be dropped completely. I will consider the development of the credit position carefully in relation to the bank figures, which are still above the ceiling, and other factors, as the autumn develops.

Mr. Richard Wainwright: Does the Chancellor agree that the reluctant toleration of each of these restrictions which obtained when this country was in persistent deficit will not prevail now that we are in surplus, and that our trading partners, who were affronted by the original import deposits scheme, will be sorely tempted to retaliate?

Mr. Jenkins: I do not think that this will happen. Our trading surplus is substantial and, I hope and believe, decisive, but it is recent. I believe that most informed opinion in countries overseas wants to see this trading surplus become permanent, as, I believe, do the great majority in the House.

Mr. Barnett: When the Chancellor gave the first figures for domestic credit expansion, did he take into account the fact that he intended to continue the import deposits scheme? If not, to what extent is the figure which he promised the I.M.F. now changed because of keeping on the import deposits scheme and has he not now a figure of domestic credit expansion very much tougher than that which he originally announced?

Mr. Jenkins: I did not take it into account because I had not decided whether to recommend to the House that we should extend the import deposits scheme. To that extent it is a factor on the stiffening side. Countering that must be the fact that the banks are very sub-

stantially above the planned ceiling. But I will take these various contra factors and others into account in watching, as any Chancellor of the Exchequer should, the development of the credit position in the forthcoming months.

Mr. Boyd-Carpenter: Is it not a fact that the true value of the £50 allowance is reduced every year by inflation in this and other countries? How does the Chancellor expect confidence in sterling to be re-established when every British tourist is a walking advertisement for the fact that crisis measures are still in force in Britain?

Mr. Jenkins: It is, of course, the case that the value of the £50 allowance is less now that it was when it was introduced. It is, however, still a good deal more than the £25 which was in operation during quite a part of the period when the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) was Financial Secretary to the Treasury—[HON. MEMBERS: "No."]—as well as for a short period following a year's surplus in 1952.

Mr. Frank Allaun: Is my right hon. Friend aware that the obvious disappointment of hon. Members opposite about the £50 allowance is certainly not shared by 95 per cent. of the population, to whom it does not matter at all? Is the Chancellor aware that there are far more important and worth-while things to be changed before this change is contemplated?

Mr. Jenkins: I am grateful for my hon. Friend's support, but, with respect, I do not agree with him. I think that this decision will cause disappointment to considerable numbers of the British people. But I would rather that there were some disappointment today on this issue than that there should be graver disappointment later because we have relaxed too soon.

Sir A. V. Harvey: Reference has been made to the view of our E.F.T.A. partners on extending the import deposits scheme. Will the right hon. Gentleman go back further and recollect the reaction of E.F.T.A. countries over the import surcharge? Does he realise that his decision will do infinite harm to the liberalisation of trade between this country and the E.F.T.A. countries? Does


he also realise that industry has been led by hints and leaks to believe that this tax was coming off and that it will disturb many people in their efforts for the coming year?

Mr. Jenkins: I hope that it will not have that effect on the E.F.T.A. countries. I believe that Governments abroad realise that we can buy only the imports which we can afford in this country and that, broadly speaking, we have provided a very good import market both for E.F.T.A. and others. On the whole, their imports to us have grown faster than have our exports to them.

Mr. Arthur Lewis: While welcoming the excellent reports that we are now getting almost every week, may I ask the Chancellor whether he recollects that one of the remedies that he took to bring this about was the imposition of taxation on the social welfare services? Can he give an assurance that one of the first things he will do when he has the opportunity is to remove all charges on those services in preference to such things as have been suggested?

Mr. Jenkins: I do not think that that point arises directly out of the five Questions which I answered together. I cannot give any assurance.

Mr. Peyton: Does not the right hon. Gentleman think that there is something rather mortifying in having to follow up his sad little statement with the remark that Mr. Schweizer had taken no objection to the indications that he had given him of his thoughts? Will he not accept that it is about time that we in the country became masters of our own affairs and got rid of grubby, self-defeating restrictions of this kind?

Mr. Jenkins: There is no question whether or not we are masters of our own affairs. But in questions of this kind, like any other of the 113 member countries of I.M.F., we have to put the position to the I.M.F. The best way in which we can become and are becoming fully masters and in a stronger position in the I.M.F. is by building up a secure balance of payments.

Sir W. Bromley-Davenport: Will the right hon. Gentleman give a solemn undertaking to all parties in the House that he will increase the travel allowance substantially at or about the time of his "give-away" Budget next spring?

Mr. Jenkins: No, Sir, I will give no such undertaking. The undertaking that I will give is that I will endeavour to remove the restriction as soon as I believe it is safely compatible with a continuing surplus on the balance of payments.

REGISTRATION OF CHIROPODISTS

3.53 p.m.

Mr. Sydney Bidwell: I beg to move,
That leave be given to bring in a Bill to provide for the compulsory registration of chiropodists; to provide for the introduction of minimum standards of training and minimum qualifications for registered chiropodists; and for connected purposes.
My Bill has nothing to do with the health of the £. It is to do with the health of the feet.
I am grateful to you, Mr. Speaker, and to the House, for giving me this opportunity to ask leave to bring in my Bill for the registration of all those practising chiropody, the Long Title of which hon. Members will see in the Motion which I am moving.
Optimism is a useful thing to have in this House, but I would be very optimistic if I thought that I could get this Bill put into law this Session. I am, nevertheless, very grateful to you, Mr. Speaker. Let us say that the possibility is not entirely excluded, but remains, nevertheless, very remote.
I wish to inform the House of the way in which I first became anxious about this matter. A constituent of mine came to me pointing out that a great deal of chiropody in this country is practised without qualifications, with all the attendant dangers to the health of the foot and the effects that that would have on general physique. From then on I became greatly interested. As a result of my desire to present this Bill, I have had a number of communications and some of them have even alleged that the maltreatment of feet has led to great difficulties, even so far as losing a limb. I do not want to over-dramatise the position, because there would be no proof, and, also, practices by unqualified people are quite legal at present.
The House should appreciate what chiropody really is. It includes the provision of skilled care for painful and deforming conditions which afflict the human foot. It provides a service which is essential to a large proportion of the population, and one which is provided from no other source. The scope of practice includes diagnosis and treatment of superficial inflammatory and infective

conditions, of structural and functional derangements of the foot, and the management of feet affected by general medical and surgical states, such as rheumatoid arthritis, diabetes and circulatory and nervous disorders. The profession is technically equipped to provide a comprehensive foot care service for all ages from the very young to the very old.
The recognised course of training consists of three years' intensive full-time study. It includes basic sciences and relevant medical subjects and, in particular, the detailed anatomy of the lower limb. Students with the necessary educational attainments are instructed by appropriately qualified scientists, physicians, surgeons and chiropodists. The course also ensures thorough clinical training and practice. The level of professional education is tested each year by examinations conducted by independent examiners in each subject. This level of training is necessary because chiropodists are not only therapists, but also diagnosticians.
With few exceptions, their patients come to them directly, and in this respect they are unique among the para-medical profession. Obviously, they have to diagnose what is wrong with the foot before they can treat it adequately, but, in addition, they are often the first professional people to be consulted about symptoms occurring in the feet indicating general systemic disease requiring medical investigation and treatment. In other words, they often have to decide whether it falls within their province to treat or not to treat.
The fact that persons with little or no proper training are free at present to set themselves up and purport to practise as chiropodists means that the public are exposed to a threefold risk. They are at risk from unskilled and inefficient treatment, and it must be remembered that chiropodists use a variety of sharp cutting instruments and potentially dangerous substances such as acids. They are at risk because of the absence of skilled diagnosis; and they are at risk of commercial exploitation by unregistered practitioners who are subject to no professional or ethical sanctions. The general public deserves to be protected from these risks and to be assured of minimum standards of professional competence when they consult a chiropodist.
In 1960, Parliament passed the Professions Supplementary to Medicine Act. It provided for the setting up of a number of boards, including a Chiropodists Board. The board has power to register persons who have taken a course of training and passed an examination of which it approves. The board can also register persons who are able to satisfy it that on 30th June, 1963, they were competent to practise the profession by virtue of their training and/or practical experience. I mention that because I do not wish, by my proposal today, to deprive of a living people who are doing a good job. I am sure that they could be accommodated within the ambit of my Bill.
Registration is voluntary. Apart from a few areas in which a local authority has power to license chiropodists, anyone without any formal training or experience can set up in practice and describe himself as a chiropodist. By Statutory Instrument in 1964, the Health Ministers directed that State registration was to be a condition of employment in the National Health Service. It is extraordinary that in the public services, where contact with the medical profession is likely to be close, a standard is required, but in private practice, where contact with the medical profession may be slight or even non-existent, no standards of any sort are required. It is to set that right that I ask leave to bring in the Bill.
The present situation allows entry of persons into the profession of chiropody, some of whom have had only minimal training and experience, and some having had no training at all. It is not known exactly how many persons there are in these categories, but it is thought that they are numerous. They are answerable to no one, and their professional standards and conduct are subject to no control. There is evidence to suggest that the public assume that anyone practising as a chiropodist must be properly qualified to do so. The other day, the wife of an hon. Member said to me that she took it for granted that every person practising chiropody would be so qualified.
The fact that persons who have not taken a course of training may set up in practice and style themselves chiropodists discourages many who might other-

wise enter the profession. The continuing legal existence of a group of unqualified practitioners must inhibit the development of the profession and encourage the sponsors of courses which are substantially less in content than that approved by the Chiropodists Board.
The public must be at risk from the situation which I have outlined. My Bill would extend the principle which Parliament has established by requiring that there should be compulsory regisration for chiropodists. This can be achieved without prejudice to the livelihood of those at present unregistered. As a result, and in time, the standards of all who practise will be raised, to the greater benefit of the community, and I believe that an important social safeguard will be secured thereby.

4.2 p.m.

Mr. John Smith: I oppose the Motion. I realise that the Bill may well not reach the Statute Book, and I have no wish to inconvenience the hon. Member for Southall (Mr. Bidwell), but I do not consider that we should allow it to be introduced. There is a matter of principle here. What I have to say will take only a minute or two, and I do not intend to divide the House.
Why are chiropodists to be registered? The real reason is nothing more than that they are not registered already. This will mean a new law, to be studied by many and broken by some. It will mean new offences. It will mean more work for civil servants. It will require inspectors. There will be a small further shove on the downhill road that leads to a country in which everything which is not actually forbidden is compulsory. Do we really want a country in which everyone is organised and lined up like the graves in a war cemetery?
Further, is the registration of chiropodists what Parliament is for? It could perfectly well be left entirely to the profession. What are we to say when at the latter day, we are called to the dreadful bar of judgment and we are asked what we were doing in Parliament, at this colossal juncture in our national affairs, when there is civil unrest in Northern Ireland and industrial unrest in our own country, when our economy is far from


healthy, when society is shaken by arguments and divisions on important moral problems, and when the Russians and the Americans are not registering chiropodists, but are reaching out into space? What are we to say when we are asked what we, the heirs of Trafalgar, were doing in Parliament today, the anniversary of the Battle of Trafalgar? Are we to say, "Well, actually, we were registering chiropodists"?
This is not a party matter. I appeal to all with any trace of greatness to take their eyes off their feet. Let us leave these chiropodists unregistered. Let us leave just one unregistered corner which is for ever England.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business), and agreed to.

Bill ordered to be brought in by Mr. Bidwell, Dr. David Kerr, Dr. Winstanley. Mr. Hunt, Mr. Pavitt, Mr. Molloy, Mr. Heffer, and Mr. Scott.

REGISTRATION OF CHIROPODISTS

Bill to provide for the compulsory registration of chiropodists; to provide for the introduction of minimum standards of training and minimum qualifications for registered chiropodists; and for connected purposes presented accordingly and read the First time; to be read a Second time Tomorrow, and to be printed. [Bill 218.]

PROCEDURE

Mr. Speaker: It has been suggested to me from both sides of the House that we might have one debate on Motion No. 1, Business of Supply; and Motions Nos. 2, 3 and 4 together. At the end of the debate, I shall put each separately, but the Leader of the House will move the first Motion, and the debate will proceed on that and the remaining three as follows:

PROCEDURE

That this House takes note of the First and Second Reports from the Select Committee on Procedure in the present Session of Parliament.

STANDING ORDER No. 2 (EXEMPTED BUSINESS)

That Standing Order No. 2 (Exempted Business) be amended as follows:

Line 49, leave out 'either'.

Line 58, at end insert or

(c) that at this day's sitting any specified business may be entered upon and proceeded with at any hour, though opposed, and that other specified business may subsequently be entered upon at any hour though opposed, and may be proceeded with during a specified period after ten of the clock, or after it has been entered upon, whichever is the later'.

STANDING ORDER No. 60A (SECOND READING COMMITTEES)

That Standing Order No. 60A (Second Reading Committees) be amended as follows:

Line 15, leave out 'twenty' and insert 'sixteen'.

Line 15, leave out 'eighty' and insert 'fifty'.

4.7 p.m.

The Lord President of the Council and Leader of the House of Commons (Mr. Fred Peart): I beg to move,

STANDING ORDER No. 18 (BUSINESS OF SUPPLY)

That Standing Order No. 18 (Business of Supply) be amended as follows:

Line 69, at end insert'; and, in respect of any vote on account for civil departments for the coming financial year as shall have been put down on at least one previous day for consideration on an allotted day, he shall then in like manner put the question, that the total amount of such vote outstanding be granted for those services'.

Line 74, leave out 'and all such defence votes' and insert 'for the Ministry of Defence'.

Line 101, leave out from 'put' to 'be' in line 105 and insert 'the question that the total amount of the estimates for the Ministry of Defence'.

Line 122, at end insert 'or, in the case of the estimates for the Ministry of Defence on each vote in those estimates'.

I am sure that the course which you have suggested, Mr. Speaker, will be most convenient for the House.

We are now to debate two important reports. Although the time at our disposal today is limited because of the other important business on the Order Paper, it is my intention, as I said last week, to provide for a further major debate on the whole matter at an appropriate time next Session. I give that promise, for I regard the matter as of great importance.

I promise to be brief in my opening speech, but I must not fail at the outset to say how indebted the whole House is to my hon. Friend the Member for Birmingham, Northfield (Mr. Chapman) and his colleagues for their valuable work. They have worked hard and they have produced an excellent report. In the first place, they have made several useful proposals on the information which the Government should provide on public expenditure, and for the consideration which the House should give it. Secondly, they have proposed a thoughtful and radical scheme for the scrutiny of public policy and administration, centred upon a Select Committee on Expenditure and a series of sub-committees.

I can best summarise the proposals as being aimed at strengthening the control of the House over public expenditure, and so to strengthen the position of the House vis-á-vis the Executive.

Turning at once to the first set of recommendations, the Select Committee has welcomed the Government's proposals to publish each autumn a White Paper on public expenditure. As the House remembers, these proposals were published as a Green Paper entitled "Public Expenditure; A New presentation".

My right hon. Friends and I regard the proposals as a natural development of all the work that has been done in recent years to improve the arrangements for the forecasting and control of public expenditure. Annual surveys looking five years ahead are now a firmly established part of the operations conducted within the Government. They provide the essential

basis both for planning public expenditure programmes and for managing public expenditure as a major factor in the management of the economy as a whole. We therefore considered that we should publish the results of these surveys regularly every year, and I am glad that the Select Committee has endorsed this view.

The details of the proposals were set out at some length in the Green Paper. The main features can be briefly stated. The proposed White Papers will show regularly each year information on public expenditure plans for that finacial year and for the following four years. In the White Papers the expenditure will be analysed by function; that is to say, by closely related groups of objectives, such as defence, health, education, social security and assistance to industry.

Moreover, the information for the first three of the five years will also be shown in a new form. Public sector receipts will be shown as well as expenditure, and the figures will be broadly classified according to their impact on the use of resources. This presentation is intended to bring out more clearly the implications for the use of resources over the period for which the Government have taken decisions.

The status of the figures for the fourth and fifth years will be somewhat different, because the Government will not have taken decisions beyond the third year. The figures for the later years will represent an assessment of the cost of present policies. They will thus provide a clear indication of the prospective level of public expenditure if present plans are not modified. We also intend to include sufficient explanatory material to enable hon. Members to understand and to debate usefully the essential development of events as shown by the figures.

The Select Committee recommends that the annual expenditure White Paper should be debated by the House for two days. The Select Committee states that this debate
could and should come to occupy as important a place in Parliamentary and public discussion of economic affairs as that now occupied by the annual Budget debate.
May I say to my hon. Friends and other colleagues who are on the Committee that the Government accept the recommendation of an annual debate. We, too, hope


that this will become an occasion of considerable importance.

I should like to make it quite clear that the publication of this annual White Paper will be additional to the annual Supply Estimates. These Estimates will continue to provide full details, for the forthcoming financial year, of all the central Government's cash disbursements which require to be voted annually by Parliament. The Select Committee has recommended that the basis on which these Estimates are presented to the House should be reviewed to see if they can be presented as far as possible in functional form. Although at first sight we would not expect this to lead to any sweeping changes, we agree that the review should be conducted; but we are not envisaging any immediate changes in the Civil Estimates.

A change which the Select Committee has, however, proposed is that the Civil Vote on Account should be published in November at about the same time as the expenditure White Paper; that it should be based on the Vote for the current year adjusted for later information; and that an appropriate Motion should be put to the House during the debate on that White Paper. These proposals are entirely acceptable to the Government. We intend, therefore, to publish a Vote on Account for 1970–71 at the same time as we publish the first of the new White Papers in a few weeks' time.

In its Second Report the Select Committee has approved the reorganisation of the form of the Defence Estimates to reflect the reorganisation of financial responsibilities in the Ministry of Defence, but recommends that Vote 1, which covers pay and allowances of the Armed Forces, should be divided by Services and presented as three separate Votes. The Government accept this recommendation.

The Select Committee also recommends that a Vote on Account of Defence expenditure should be presented in February with the Defence Estimates, and that the present arrangements for the "fourth day" debate should be applied as far as possible to a debate on the Vote on Account. These recommendations are in line with the Government's own proposals. Both this change and the changes relating to the Civil Vote require

changes to Standing Order No. 18, and one of the Motions now before the House contains the necessary amendments.

I turn now to the second part of the recommendations made in the First Report, those concerned with the structure of our Select Committees system. Hon. Members will recognise that in many respects these are akin to ideas first put forward by the Committee in its Fourth Report in the Session 1964–65. The Select Committee system, and the influence of this House on the Executive, has come a long way since then. Indeed, I appeared before a new Select Committee when I was the Minister responsible for agriculture. Nevertheless, the proposals arising out of the report represent a coherent and radical approach to one of the most fundamental problems at present facing us, namely, the balance of power and influence between this House and the Executive.

The Select Committee proposes the transformation of the Estimates Committee into a Select Committee for Expenditure, which would work largely through a series of functional sub-committees and a general sub-committee. Apart from this last, the Committee envisages eight subcommittees, each comprising nine members and each responsible for considering the activities of Departments within a particular functional field of administration. The sub-committees would examine the estimates of their expenditure and the efficiency with which the Departments are administered. The sub-committees would thus be neither "subject" nor "departmental", but functional.

These proposals are, of course, both comprehensive and constructive. As I have said, they pose fundamental questions of the relations between Parliament and the Executive. They have wide-ranging implications for the work of hon. Members and Ministers and for the Civil Service, and they constitute a considerable development in our constitutional arrangements. As such, they demand the most thorough—though not dilatory—examination, both by individual hon. Members and by the Government.

As I have already informed the House, the Government are at present undertaking a full-scale review of the work of the present Specialist Committee experiment with a view to considering what


more permanent arrangements they should recommend to the House. After all, in the end it is the House which will have to approve or disapprove. Naturally, the Select Committee's proposals for a comprehensive system will form a most important element in everybody's thinking.

Mr. John Mendelson: Will my right hon. Friend, when considering the recommendations of the Select Committee, also bear in mind, on the matter of scrutiny, that many hon. Members are opposed to Select Committees on defence and foreign policy and would prefer to see the Floor of the House as the main forum for such debates?

Mr. Peart: I accept that my hon. Friend has views on this matter, but I will not debate which is the better system. Many hon. Members believe that the main debate should take place on the Floor of the House; other hon. Members take a contrary view. Yet other hon. Members argue that the idea of Select Committees should be developed even further. I accept that there are varying views on the matter.

Mr. Eric Lubbock: When the right hon. Gentleman reviews the existing Select Committee set-up, will he take advice from the chairman of the Select Committees to make sure that their views have every opportunity to be presented to Ministers?

Mr. Peart: Yes, Sir, I am doing this. I hope to see the chairman of every Committee in the House. We are undertaking a major survey on this matter, as I believe I said this in answer to a Question some time ago, or on a more informal occasion. I feel that we should examine the matter carefully.
The Select Committee's Report is important since it injects some new thinking into our discussion. I pay tribute to hon. Members on both sides of the House who sat on the Committee. Both in this debate and on subsequent occasions I should like to hear the views of others—

Mr. Donald Chapman: Will the review which my right hon. Friend has in mind be completed in time for him to announce the Government's views in the debate which

he has promised at the beginning of next Session?

Mr. Peart: I cannot be specific, but I will try to hasten the review. I will also try to get early decisions. It will be of great importance to the House. The Government must make up their mind and will make recommendations on which the House can come to a decision. In the end it will be for the House to decide. This will affect work on both sides of the House. It is not just a matter of party or Government considerations. That is why I stress the fact that I should like to hear hon. Members express their views in this debate.
I hope that the House will forgive me, for soon I have to leave the debate to chair a very important Committee on a matter of privilege. I hope that the House will not feel that I am being discourteous. My right hon. Friend the Chief Secretary to the Treasury, who will be winding up the debate, will convey to me any points in the debate which I may miss.

Mr. John Boyd-Carpenter (Kingston-upon-Thames): Could the right hon. Gentleman clear up one matter which is of considerable importance? Pending the considerable changes which are to be made, will he hold up the reappointment of the existing Select Committees which in the ordinary way he ought to be setting up next week?

Mr. Peart: The right hon. Member has anticipated what I was going to say. There are two particular points which are worthy of attention. The first is whether a comprehensive system of scrutiny Committees is likely to add to or detract from debates on the Floor of the House. The second is whether, if there is to be such a system, whether one concentrating on public expenditure would form the best framework.
We must remember that there are in existence a number of specialist Committees which are currently engaged in valuable work. I am not clear how the proposed system would fit in with the present Specialist Committees. My personal view is that it is unlikely that the comprehensive system could run in parallel with a number of Specialist Committees, not least because of the difficulties of manning both systems. It would be unfortunate if


the existing Specialist Committees were unable to complete the important inquiries they are undertaking. I intend, at the beginning of the next Session, to propose that the present Specialist Committees should be reappointed to complete their work. Similarly, I shall propose that the Estimates Committee be reappointed for the time being on its present basis.
In the meantime, the Government will continue their review of the whole matter in the light of the Procedure Committee's report. I hope later next Session to make proposals for the longer term and that there will then be a full debate on those proposals.

Mr. Speaker: Since there are a number of hon. Members who wish to take part in the debate, I would remind the House that an early Select Committee on Procedure expressed views on the need for short speeches. Some of the members of the Committee on Procedure may remember those words when they come to make their remarks.

4.26 p.m.

Mr. Selwyn Lloyd: I should like to thank you, Mr. Speaker, for reminding me of the recommendation of a Select Committee of which I was a member. I will try to conform.
As a member of the Select Committee whose report we are now discussing, I should like to thank the right hon. Member the Leader of the House for his kind remarks about the work of the Committee. It held 22 meetings and heard a great many witnesses. It was a severe test of the mental capacities of members of the Committee. Personally, I have never worked so hard on any Select Committee. I have never before had to tie a wet towel round my head so often in order to understand the evidence of so many witnesses and the memoranda which were put before us.
I wish to pay tribute to the chairman of the Committee and my fellow members and also to the witnesses who appeared before us and who took such great care in presenting their evidence to us.
I am glad that the right hon. Gentleman the Leader of the House has made the decision to debate the report so soon. Too often reports are allowed to lie in pigeon-holes. The report is an attempt to work out a system under which the

House more effectively can scrutinise public expenditure than in the past. I deliberately use the word "scrutinise" since it is contained in one of the headings to the report. "Control" is the wrong word to use in this context. In the old days, by the withholding of Supply, there was a measure of control as to how money voted was actually spent. In these days, scrutiny is a much more realistic term. It is now "scrutiny", brought to bear in the hope that it will influence future policies and methods of administration.
The changes proposed flow from the Report of the Plowden Committee. My own belief has always been that Departments should forecast their expenditure ahead for a period of years. I spent a good deal of time in the summer of 1955 in trying to achieve this at the Ministry of Defence and when later on, in 1960, I went to the Treasury, I was determined to see that this should be done.
Therefore, I was delighted when the Plowden Report suggested a five year forward look and I accepted it at once. At the time I shared some of the doubts of the Plowden Committee; in page vi of this Report of the Select Committee on Procedure we see that the Plowden Committee expressed doubt.
whether any Government will feel able to place these surveys before Parliament and the public. To do this would involve disclosing the Government's long-term intentions for a wide range of public expenditure; and also explaining the survey's assumptions about employment, wages, prices and all the other main elements in the national economy.
But my right hon. Friend the Member for Barnet (Mr. Maudling) published a forward look in December, 1963 in Cmd. 2235.
There have been subsequent endeavours to do the same by this Government. There are differences of opinion as to the value of exercise. Paragraph 17 of the report puts the argument clearly and it is worth repeating:
The advantages of publishing such forecasts would be that Parliament and the public, having been informed of the dangers to the economy if the forecasts were exceeded, would be more likely to heed such dangers in considering their actions in relation to the level of prices and earnings. The disadvantages of publishing such forecasts would be that the forecast figures would be accepted as a minimum in bargaining on earnings and in determining prices and that this would cause serious economic difficulties.


Then we say that, on balance, the Committee thinks that we should proceed with the practice of publishing these reports.
I think, therefore, that we are all committed to continuing to try this method of parliamentary scrutiny and to try to make a success of it. It is a difficult exercise, and I do not think that anyone has any illusions about it. But I believe that we should continue. Putting it at its lowest, we shall learn a great deal, perhaps as much about what should not be done as what should be done in this forecasting.
It may improve the language of the political dialogue. We had an instance of it at Question Time today. A Minister is accused of cutting expenditure if he decreases the rate of increase. I seem to remember that when £43 million was given to the teachers instead of £48 million, a Chancellor was accused of cutting teachers' salaries and when the figure spent went up by £140 million in one year he was accused of making a savage attack upon education. The practice continues.
If this projection is to be attempted, it should be published at the right time of the year and debated then. We agreed that November is the right time for publication and debate, and I was glad that the right hon. Gentleman indicated that it would be a two-day debate however that may be arranged.
The reason it is important to debate it in November is that estimates of expenditure for the following year are fairly firm by then, but not absolutely so, and those for the year after next can be influenced. The Budget, also, is not absolutely firm, and such a debate will have an effect as the years roll on and we have comparisons with previous debates and previous projections.
If the new process is to amount merely to an annual White Paper and a two-day waffle about it, no one will be satisfied. We want to see an effective course of action throughout the following months which is likely to lead to results. Sometimes the Budget debate is criticised as a waste of time, but I do not agree with those criticisms. It is true that parties and individuals strike individual attitudes, but there are occasions when the Budget

debate shows a violent reaction to one or more of the Chancellor's proposals. It may provoke thought and valuable suggestions, and the debate is followed by action in the form of the Finance Bill, the examination of which sometimes leads to action being taken on some of the ideas thrown out in the Budget debate.
This new procedure must also have the chance of resulting in something. This would happen if there was a Select Committee, whether called Expenditure or Estimates, starting work thereafter with sub-committees tackling various Departments, their reports being published before the end of July, with plenty of time to consider and perhaps debate them before the next five-year projection and the next two-day debate.
We do not propose any change in the Public Accounts Committee. It does an excellent job of work. There is great confidence in it. It has an experienced staff of auditors headed by the Comptroller and Auditor General. We cannot see any change being necessary in the status and work of that Committee.
Next, we have the Select Committee on Nationalised Industries, which spend a lot of money. Again, we suggest no change and think that the Committee should continue. At one time, we considered whether the staff of the Comptroller and Auditor General might help that Select Committee, but we came to the conclusion that the methods of audit are so different that probably it was not a very good idea. However, I think that we should still consider whether that Select Committee should not be equipped with more resources to do its job.
We are suggesting a change in the name, organisation and scope of the Estimates Committee, but not in the substance of its work. This is on the lines of the suggestion put forward by the present chairman, previous holders of the office of chairman of the Estimates Committee and more particularly in the Four Report of the Select Committee on Procedure. 1964–65, to which the right hon. Gentleman referred.
The structure suggested is set out clearly in the report, with the Select Committee forming itself into a number of sub-committees to deal with expenditure and administration in various Departments. A list is set out in paragraph 33. No one pretends that it is necessarily


the perfect list. With regard to external affairs, for example, I do not think that there is any intention of having general debates on external affairs. We are thinking more of a scrutiny on a matter of expenditure like overseas aid. It is not desirable for the broad issues of defence or foreign affairs to be put to a sub-committee. I would not give the highest priority to the setting up of subcommittees on those two subjects. So it is not the perfect list. It is merely the outline of a possible plan.
Those sub-committees should try to develop a systematic check on the expenditures of the Departments allotted to them. What is more, as new methods of management are introduced in Government Departments, these sub-committees should be better able to assess the performance of those Departments.
I hope that hon. Members will read paragraphs 21, 22 and 23 of the report. I will not read them now. Instead, I want to make a reference to the Fulton Committee. That Committee dealt with the structure of Government Departments and the promotion of efficiency. In paragraph 150, under the heading "Accountable and Efficient Management", it defined "Accountable Management":
Accountable management means holding individuals and units responsible for performance measured as objectively as possible. Its achievement depends upon identifying OT establishing accountable units within government departments—units where output can be measured against costs or other criteria, and where individuals can be held personally responsible for their performance.
If that can be done, it is a very important new development in the whole of our approach to Government expenditure.
It is not entirely new ground. To some extent, it has been adopted already in the Ministry of Defence, and the evidence which we received from those in authority in Whitehall led us to believe that the climate of opinion there is favourable to this new approach.
If we can get this attitude to Government expenditure, with some identification of units and of persons responsible for given projects, and get the results costed according to various criteria, that will represent a revolution in this House's methods of scrutinising public expenditure and public administration.
There is one important innovation in the scheme that we set up in the Report.

It is that there should be a General Sub-Committee of the new Committee of Expenditure or Estimates. We think that the duties of the general sub-committee should be the scrutiny of the projections as a whole. That scrutiny will become more valuable as the process continues and we get the comparisons to make.
The second duty of that General Sub-Committee would be to see that the reports of individual sub-committees are debated or considered when necessary or advisable. We feel also that the General Sub-Committee should look at the work of the Committee as a whole, guiding the sub-committees and, if necessary, drawing together the general principles which may emerge from the considerations of the individual sub-committees. I see it as one of the most important bodies in the House, revolutionising our scrutiny of public expenditure.
I will not go into further details. I quite agree that change is not necessarily reform. On the other hand, objections will always be raised to anything new. We will be told that there would not be enough hon. Members, there would not be a sufficient number of Committee rooms, there would not be sufficient Clerks, or, indeed, the time for these Committees to do their work. But if there is the will there is a solution to all these problems. They are not insoluble.
As to the other Select Committees, again, with experience of this new system, their role will fall into place. We want the new set-up to be scrutinising expenditure and administration, and if there are other issues of policy, quite away from expenditure or administration, there may be a case for other particular Select Committees. I do not think that the two concepts are at all inconsistent, but we want this to be a framework for the House more efficiently to scrutinise public expenditure.
Therefore, I recommend these proposals. I was glad to hear the right hon. Gentleman say that they will be debated again soon. I note that he intends to have all the existing Select Committees set up again to continue their duties, which is all right—as long as that is not a means of completely frustrating this report. I hope that he will get this system started next Session, even if not


with the full set-up suggested in paragraph 33. I support this proposition.

4.42 p.m.

Mr. Donald Chapman: I wish to deal with a most important issue, that of the Committee system, which is worrying a number of my hon. Friends. Before I do so, I should like, as Chairman of the Select Committee on Procedure, to thank my right hon. Friend the Leader of the House for the kind words which he has said about our report and for bringing it so quickly before the House—after all, this has been published for only four weeks—and for promising us another debate on it in a matter of weeks. This is a considerable debt.
I would also thank the members of the Committee, and particularly the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd). We have what I call "Ancient and Modern" on the Select Committee. We have some of the very newest hon. Members and some of us who have been here rather too long. This ancient and modern approach brings out rather good hymns, provided that we blend the hymn as we go along. There is a great team spirit on the Committee and it is a great pleasure to work on it, even though I, like the right hon. and learned Member for Wirral, sometimes need the help of wet towels.
This should also be an occasion to thank the Clerk of the Committee and Mr. Robertson, our adviser. The amount of work which they do, not only just before the Committee meets but also in private consultations with me, in preparing papers and the scheme of work of the Committee, is considerable. I do not know how many times papers were drafted and redrafted. This is continual work and we owe an immense debt to the staff and our advisers.
I should also, curiously enough, like to thank the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). During last Session, a very important subject which he wanted us to discuss—namely, Question Time—was squeezed out by the sheer size of the job which we had undertaken. I hope that he understood the position and that he would agree that we might exert pressure through the usual channels to discuss his

subject during the coming Session, through a new procedure sub-committee.

Mr. Boyd-Carpenter: indicated assent.

Mr. Chapman: Coming to the burden of the report, I do not want to deal with the broad suggestions—I agree with what the right hon. and learned Member for the Wirral has said—relating to the new form of the Vote on Account in the Chamber, the new form of the annual Vote, the whole necessity of discussing these matters in a rolling programme and adjusting our approach to the matters of scrutiny of public expenditure, to the fact that the figures for one year are meaningless unless taken in the context of the total programme and its development as the years roll on.
The scheme which we have set out meets the requirements of the Chief Secretary in his Green Paper. I should like to say how much we appreciated that Paper. I suspect that he might have had trouble getting it through Whitehall, so innovating was it. To persuade Whitehall to "let its back hair down", particularly in front of the House of Commons, was a considerable achievement by my right hon. Friend. His Green Paper became the cornerstone of our subsequent recommendations in this field.
I now come to the more disputed part of the report, that on the Committee system. I know that there are some misgivings about this, and I want to try to set them at rest. This is not a new, vastly novel system. It is rebuilding the Estimates Committee into a form suitable for the new procedure of examining the Government's expenditure. This is the first point to understand. My right hon. Friend said that this is very similar, in many respects, to a report four years ago recommending the revamping of the Estimates Committee. We are building on what we have here—a great fund of experience in this field—and simply seeking to bring it up to date in terms of the realities on which these matters are decided in Whitehall.
I would say to my hon. Friends who are worried about this that the present system is very silly anyway. We are allowing the Government to "get away with murder". We have before us cash Estimates, which we examine. We know


when we receive them that there is a possibility of changing perhaps 2½ per cent. That may be an exaggeration, but the figure is very small. All the rest of our annual expenditure has been pre-committed in the five-year programmes as adjusted year by year, and we have never ever, either in the House or in a Committee system, adjusted ourselves to take part in the decisions in that major new process.
It is ridiculous, in the modern context, to end up with Parliament handing out the annual cash flow without ever having taken part in the policy decisions for which that cash flow is intended. This is a major remedy which we seek and we wish to use the old system of the Estimates Committee, brought up to date, to do it.
My hon. Friends will say that this is all very well, but that we might end up with a Committee system which became so powerful that it began to take on some of the bad features of the American system and detract from the debates in the House. Let me try to deal with that as squarely as I can. First, what will these Committees do? I must set that out first so as to explain why I think that this argument of my hon. Friend's is mistaken.
The first thing which these Committees would have to do—this is a personal view, with which the right hon. and learned Member for the Wirral may disagree—at the beginning of every Session —they would be functional Committees, tying in with the new, functionally-presented White Paper of the Chief Secretary —is call before them the chief accounting officer of the Department in their field and say to him, "We have your annual Estimates and we will increasingly have, if the recommendations of the Committee are carried out, attached to the annual Estimates but not replacing them, a functional statement of the cash spending, an attempt to show the output aims of the Departments and the direction of the cash flows in achieving those objectives. Would you go over the detailed figures of your Department with us? We want to know what new objectives you have set in this current year and what changes you are making, what is the new emphasis in your Department, what policy changes in respect of aims and

outputs in cash spending your figures indicate. We want to go over with you, so to speak, a 'State of the Union Message' about the spending of your Department."
Then, they will ask, as the Committee recommends in its report, for a number of the cost-benefit studies behind policy decisions. An example is the decision to build a new London airport. We suggest —this was given in evidence to us on more than one occasion—that someone should begin to say, as Whitehall should say in making these decisions, "We should like to see the cost-benefit studies of siting the new London airport at Foulness, in the Midlands, or somewhere else". All these decisions are made behind closed doors and we are the last to get the information.
I have shown that the Committee will say, "This is an interesting figure which emerges from your 'State of the Union Message' to us, Mr. Chief Accounting Officer. Let us have the cost benefit studies of, for example, the siting of the new London airport, or of your decision to spend, say, £1,000 million more in the next year on preserving the lives of old people instead of spending it on nursery schools". This point was made by a witness. I am choosing examples which may not be realistic, though they show the sort of detail which this type of committee would be examining.
I do not believe that a system of this kind would detract from the great policy debates that take place on the Floor of the House. Indeed, matters of this kind are never likely to conflict with the work that goes on on the Floor. They are the detail and minutiae of decisions that are made inside every Government Department.

The Chief Secretary to the Treasury (Mr. John Diamond): While I am following my hon. Friend's speech with the greatest care, and as I have some responsibility in these matters, I wish to be sure just what his proposals mean. I have read the proposals in the report with great care and have listened to his remarks so far with equal care. Is he distinguishing between great policy matters which are discussed on the Floor of the House and small policy matters which are discussed in Committee, or is he distinguishing between policy matters on the


Floor of the House and matters other than policy in Committee, remembering the wording of the report?

Mr. Chapman: I know at what my right hon. Friend is hinting, but he will appreciate that the sort of Committees about which I am speaking would be considering expenditure and applying a systematic eye to the expenditure of each Department, saying, "We want to examine the purposes of the expenditure". If some policy probing becomes necessary in that process, then that must happen. That cannot be avoided. However, the prime duty of these Committees will be to examine the expenditure being undertaken, the output at which it is being aimed and then, after that examination, to examine in far-ranging inquiries the effectiveness of the Department concerned in achieving those aims.
I am, therefore, distinguishing between the great policy objectives in party politics which are concerned with great totals of public expenditure—matters which will continue to be discussed on the Floor of the House—and the minutiae of individual groupings of expenditure undertaken by Government Departments. These Committees will be looking—not immediately, because the output budgeting figures will not be available in every Department for perhaps five or 10 years; this process of looking will gather momentum as time goes by—at all the matters I have described and be conducting, to use a phrase used by the Economist, the beginnings of a management audit of Government Departments. This is a useful phrase which summarises the work which these Committees, as I envisage them, will be doing.
I hope that these remarks go some way towards reassuring my hon. Friends that there is no attempt here to bring Ministers before Committees to examine them on the great issues concerning the running of their Departments, matters which would normally be discussed on the Floor of the House.
If my hon. Friends do not accept this system, they are really saying that as we have accepted in recent years that we can never, on the Floor of the House, examine public expenditure effectively—expenditure has grown so large and is so detailed that it is impossible to scruti-

nise it in debate on the Floor of the House; we now use Supply days to examine Government policy rather than Government expenditure—we should abandon the idea of scrutinising Government expenditure.
Having accepted that we can no longer effectively conduct this examination of Government expenditure on the Floor of the House, we cannot just leave matters there and not bother to do it. Another way must be found and I believe that the Committees of which I have been speaking could effectively scrutinise Government expenditure in a form which the House pretended to do before, that it has ceased to do for many years and that it should begin to do again before it is too late, for if that time comes our chances of exerting influence on Whitehall will disappear for ever.
The Select Committee on Procedure makes it clear in paragraph 35 of its report just what these committees will do. That paragraph points out that each subcommittee will
…first, study the expenditure projections for the Department or Departments in its field, compare them with those of previous years, and report on any major variations or important changes of policy and on the progress made by the Departments towards clarifying their general objectives and priorities".
The paragraph goes on to say that each sub-committee
…should examine in as much detail as possible the implications in terms of public expenditure of the policy objectives chosen by Ministers and assess the success of the Departments in attaining them".
It also sets the task of each sub-committee as inquiring
…on the lines of the present Estimates Sub-Committees, into Departmental administration, including effectiveness of management".
What will happen after these Committees have done this study in the round at the beginning of every year into the way in which Departments are being run in terms of their expenditure objectives? The Committees will then move on to selecting topics in Departments from the functional point of view and study each topic in depth on the lines of the present Estimates Committee, perhaps presenting a thorough report on, for example, the siting of a new London airport or any other matter which seems to be of particular interest.


This would have considerable advantage because, in such a functional set-up, Government Departments with two or three departments in each functional sphere could expect one Estimates Committee type of investigation once every two or three years. This is a reasonable objective which should not put panic into the hearts of those in Whitehall or make hon. Members feel that we would be undertaking too much. It is time that a body of some sort began to do this work, and I am sure that bodies of the type I have described would not detract from matters being debated on the Floor of the House.

Mr. James Dickens: While I agree that it is important that sub-committees of this type should consider matters like, for example, the siting of a third London airport, I take it that it will also be possible to raise important policy questions—I refer to matters going beyond the aspects mentioned by my hon. Friend—including the whole question whether a third London airport is necessary.

Mr. Chapman: I would think that my hon. Friend is right. These Committees would learn as they went along how far they should go.
However, we must recognise, even though I am doing my best to allay it, the fear which some hon. Members may have about the danger inherent in the point my hon. Friend has made. These Committees must be run with common sense to avoid them going too far and ventilating to too great an extent any subject which should be left to be debated on the Floor of the House. We must, therefore, use good sense and avert any danger that might occur. I would, therefore, prefer not to start discussing objectives at this stage. The Committees must learn as they go along.

Sir Douglas Glover: The hon. Gentleman has not completely removed from my mind a concern about these Committees going into policy matters. For example, a Committee might ask, "Why are you spending £250 million more on old people's homes rather than on nursery schools?". The accounting officer might simply reply, "This is a policy decision of the Government".

Mr. Chapman: That will happen in some cases, but in others the accounting officer will say, "This is a matter on which we have done some cost benefit studies which we are willing to let you see". In other words, some of these matters will not be major policy decisions which Cabinets must keep to themselves, but matters of public concern about which dispassionate decisions must be taken and which can be discussed openly. In other cases we might wish to summon a Minister and ask, "Do you want to talk about this with us, or is it a policy decision?". As I explained, we will have to learn as we go along and not be too ambitious to begin with.
Another objection to this form of Committee system is a fear about the size of the general Committee. It is said that it will be composed—this is our proposal—of representatives of the eight sub-committees, plus eight other members, and that it will have power to direct the general work of the whole group of sub-committees. Some hon. Members have questioned how it will be possible to have eight additional people; eight in addition to the eight representatives of the sub-committees. After all, some have suggested, they will have authority, or even cheek, to tell the subcommittees how to run their business.
This fear is based on a misapprehension. I do not believe that the general Committee will wish to adopt an iron hand of discipline over the subcommittees, not just about their work but about their reports. The additional eight members must be on the general Committee because of the work that that Committee will do. It will have to conduct thorough-going inquiries into the total of Government expenditure and into the White Paper which my right hon. Friend is offering to provide. That could not be done by eight busy people who are concerned with the work of their own sub-committee. That would be asking too much of them.
The report indicates what the general Committee will have to do. It is clear that its work could not be left to eight busy representatives of eight busy subcommittees. Indeed, the general Committee's whole operation would fail if it were left in that way. We therefore


believe that it should comprise eight additional experienced people to ensure that it works effectively.
What is the future of such a system? We are, if one likes, trying to introduce a systematic approach to our Select Committees, remembering that we have allowed them to grow in recent years, with Estimates Committees and Specialist Committees. I see no point in beating about the bush over this. Steadily, we will have to absorb the existing specialist Committees into the new system. In any event, we need the discipline of applying the work of each functional Committee to, for example, spending and estimates and so place it within the framework of the general system so that it can conduct its annual work.
It is wrong to set up specialist Committees that can chase over the whole sphere of departmental activities. They should do their work, but within the framework of examining expenditure on behalf of the House. This would be a useful discipline to apply to the process of investigating Government Departments.

Mr. Brian Parkyn: My hon. Friend must not overlook a matter which is at the heart of the report and which must be considered when the crunch comes. Is not my hon. Friend saying that the report is concerned solely with assessing Government expenditure; that everything is seen in financial terms? My hon. Friend has talked about the specialist Committees looking at the policy of Government expenditure. Is he aware that many things other than money come into this; that we must consider manpower and resources in terms of qualified scientists, and so on?

Mr. Chapman: I hope that my hon. Friend will reread the report, because we say in it that one can do all these things, but only within a proper systematic framework. These matters are tackled more effectively if one has the discipline of asking, "What is the expenditure objective of your Department?" so that one can go on to relate it to the policy objective. The effectiveness of that spending can be examined on behalf of the House.
I hope that my hon. Friend will be assured, therefore, that nothing will be

excluded. None of the present work will be discontinued. It will be done within a different framework and it will be done more effectively. That is why I say that, steadily, we will absorb the various Committees into this framework.
I was grateful for the remarks of my right hon. Friend about the report. I do not believe that we should under-rate its effect because it is impossible for us to continue without this type of systematising of our Committee system in the near future. We cannot go on with what is a less than effective Estimates Committee—the chairman of the Estimates Committee said this to the Procedure Committee—and we cannot go on with odd Specialist Committees operating in various parts of the field. We need a systematic approach to the whole field of Whitehall. Even if the precise details of our scheme are wrong, nevertheless I think that the basic idea is right and I hope that the Government will not be long before they bring forward proposals.
I have been immensely heartened by the welcome given to the report in the Press. All the leading newspapers have published editorials saying, in effect, as did the Scotsman—I quote only one, although I could quote many:
These proposals are a decided step in the right direction and the Report could mark a watershed in the history of Parliament.
Those are heavy words, but I believe that the work which my Committee has done during the last 12 months has laid the foundation for a Committee system which, once it is going, may well endure for several decades. If we have done that, we shall feel well rewarded.

5.7 p.m.

Mr. David Howell: As one of those whom the hon. Member for Birmingham, Northfield (Mr. Chapman) might describe as the moderns as opposed to the ancients on the Procedure Committee, I should like to begin by saying what an honour and privilege it was to serve under his chairmanship on that Committee and to congratulate him on the lucid and powerful presentation which he has just given of the main core of the case put forward in the Procedure Committee's Report.
I do not want to dwell very much exclusively on the parliamentary side, although that may seem odd because,


obviously, this is primarily a Report about the reform of Parliament as of the structure of Parliamentary Committees. I want to talk more about the administrative side. Before doing so, however, I should like to underline, reinforce and add my support to the main argument put forward by the hon. Member for Northfield.
The core of that argument, as the hon. Member rightly said, is an insistence on a systematic approach. It is the attempt to bring to bear some new degree of systematic public scrutiny. Obviously, it will not be totally thorough and it will not penetrate every corner of the vast range of Government activities. But the need is for questioning, and questioning primarily through the only way we have to question, which is through the costs generated of Government activities, the range of departmental and quasi-departmental activities which are carried on at public expense in the name of the public and in which this House, and an increasing number of people outside the House, believes that we should have a capacity for questioning regularly and in a way which brings to bear some degree of public scrutiny.
It seems to me, therefore, that the insistence which the Chairman of the Procedure Committee has rightly placed in what he has said on a systematic approach to the activities of government is right at the centre of our Report and ought to be quite near to the centre of the considerations of all those who are worried about the relationship between big and growing government and the individual citizen. It should be at the centre of our concern over the widespread feelings which people have that they are denied access to and denied discussion of the reasoning and arguments that go on behind the taking of major public policy decisions, and, indeed, minor public policy decisions and the thousand and one policy decisions or decisions of expenditure which seem to come bubbling out of the machine without any discussion.
Therefore, the insistence of the Chairman of the Procedure Committee on a systematic approach is central. The hon. Member is absolutely right in saying that this is the issue of major importance for our times. It is raised by the bigness

and the disparate nature of modern administration. The thing is literally too big for hon. Members to exert any proper degree of systematic control by general debate. It is too big also for it to be seriously maintained that, whatever may be said in theory, those hon. Members who sit on the Government Front Bench, as elected politicians and as people appointed with Ministerial responsibilities, can exert a systematic, detailed and continuous control over all the activities nominally within their responsibility.
There is, perhaps, a third reason why the word "systematic" lies at the centre of the argument. If one looks at the nature and structure of Whitehall Government today, there is taking place a change which is hardly ever discussed in this House and a change of significance when it comes to accountability and control. There are growing up—this trend has gone on for many years and is not confined to one Government or another—a great many new bodies, agencies, commissions, councils, grant aided bodies and quasi-Government bodies of indeterminate constitutional status. They are to be found not only in our Government. The Federal Government in Washington has sprouted them in even greater profusion.
Since those bodies dispense public money, sometimes in very large amounts, the question arises to whom those agencies—and I have no doubt that there will be more of them in the future—are accountable and how best they can explain and bring before Parliament and the public their views and the reasons why they should spend money.
Just as the Select Committee on Nationalised Industries was insisted upon and proposed by this House to meet the constitutional development, which at first people did not perhaps fully recognise, of the major nationalised industries, so also, if we are to meet the even more pressing need of this vast range of quasi-Government bodies, we will have to accept that it is only through a systematic committee system that the public and Parliament can discuss their activities, and, indeed, in some cases, know about them. It never ceases to amaze me, and, I suspect, other hon. Members, to find how many agencies and committees are attached as appendages to Departments


and about which there is hardly any public discussion and about which very few people know.
For those major reasons, however much one may regret any suggestion that policy discussion is carried on not on the Floor of the House, the fact remains that unless we develop a systematic committee process, existing activities on a very large scale go undiscussed and unscrutinised. Furthermore, the scale will grow. The exercise of public power of a kind which is never held to account in any systematic way—it may be, possibly, by chance, but never systematically—on the Floor of the House will grow. That alone seems to me to be a devastating argument in favour of taking a positive approach to the proposals of the Committee and of building on them even though, as the Chairman of the Procedure Committee has rightly said, the Committee may not have every detail right.
I said that I wanted to make some comments briefly on the administrative side, and that is what I propose to do. I do not wish to speak further on the Parliamentary side because I am one of the moderns, as the Chairman of the Procedure Committee calls them, and there are many present in the Chamber with experience far vaster than any of us who have newly arrived can have on the Parliamentary side.
There are two comments on the administrative side that are worth making. The first concerns the question of how the functional Committees will work and what kind of information and consideration they will demand. There is no use in beating about the bush on this matter either. Here we have to face the fact that if these Committees are to work effectively, if they are to be given information and arguments and are to create a forum of opinion and discussion which will be of value to the House and to the public, we are posing a change in the relationship between civil servants and Ministers and between civil servants, politicians and Members of this House generally.
This is something which one could easily attempt to slide round. But it would be wrong for us not to recognise that in its proposals the Select Committee's Report makes a challenge to at least one interpretation of the rather

recently established constitutional theory of Ministerial responsibility. When I say "one interpretation", I do not mean the view that a Minister is politically responsible as a member of the Government, and, perhaps, as a member of the Cabinet, for the policy of the Government and of the Cabinet and must be questioned in this House. I mean Ministerial responsibility when it is interpreted, as it has come to be in some cases, very narrowly to mean that no civil servant and nobody below the level of a Minister may offer anything approaching an opinion or an argument in public and that anything that he advances should be strictly confined to what can be defined as a fact or a statistic
If that very narrow theory of Ministerial responsibility is to be rigidly adhered to in the name of a constitutional theory of very recent origin, we are asking our functional Committees and sub-committees to perform an impossible task. We are asking them to beat against a brick wall. It is an endeavour upon which it would be unfair to ask both to the Members of the Committees and to the civil servants who are questioned by them to embark.
If I may emphasise the point, I should like to make a further quotation in addition to that given my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) from the Fulton Report. This puts better than I can do the point which I am trying to make. The Fulton Committee talked, as my right hon. and learned Friend said, about the development of accountable management and of separate and defined areas of responsibility for which individuals are themselves held responsible.
It went on in paragraph 283 to agree that these ideas had:
important implications for the traditional anonymity of civil servants. It is already being eroded by Parliament and to a more limited extent by the pressures of the press, radio and television the process will continue and we see no reason to seek to reverse it. Indeed we think that administration suffers from the convention, which is still alive in many fields, that only the Minister should explain issues in public and what his department is or is not doing about them. This convention has depended in the past on the assumption that the doctrine of ministerial responsibility means that a Minister has full detailed knowledge and control of all the activities of his department. This assumption is no longer tenable.


I make no apology for quoting a rather sizeable chunk of the Fulton Committee's Report, because it puts the point clearly.
The main argument which I should like to put in my brief contribution to the debate is that we must recognise that if officials, hon. Members and others are to say that there can be no reinterpretation and no adaptation of the very narrow theory of ministerial responsibility to which some adhere, one must recognise that this is another way of saying that this kind of functional sub-committee cannot work and cannot be allowed to work. Therefore, let us be clear about that and not ignore it until we find, too late, that it is a wall which has been built across the path of this kind of development.
The second and final point which I want to make flows from what I have been saying. The kind of discussion which the hon. Member for Northfield so eloquently depicted taking place in these Committees, the kind of contribution to public thinking and the development of informed opinion on this or that issue, will not work unless there is coming forward before the Committees adequate data and information about the workings of a programme. There must be data or, for example, assistance to the regions, aspects of housing subsidies or the like—of a more systematic kind and more related to objectives than anything we know in the Estimates of the Civil Departments today. The Estimates of the Ministry of Defence are a different matter. In other words, it will be unfair on both civil servants and on hon. Members who try to staff these Committees if it is imagined that we can start as from tomorrow in setting up these Committees and expect them to grope their way through the Estimates as now presented to the House; and to do so by having to question civil servants, still acting absolutely properly on considerations which have been familiar for the last 30 or 40 years, with a very rigid interpretation of Ministerial responsibility; and to expect something useful to come out of it all. That would not happen, because the basic data which would need to be offered about the objectives of Government activities, upon which one could raise arguments as to whether they were being best attained this way or that, would not be available.

Therefore, what the Select Committee's Report points to, and again this is something that one should not really try to slide round, is the need for the right machinery in the Administration; the need for a modern Executive to have the data, the machinery for gathering the data and organising flows of information channels so that the data can be brought forward. Only then will civil servants feel that they are being treated fairly when asked what a particular activity costs, or will cost, or what it has cost in the past, and what the aim and purpose of the activity is.
The question, and it is only fair to end on a question and not on an assertion is: does the machinery exist in our system of budgetary control in Whitehall for producing systematic data flows so that we can begin to move towards a really informative pattern of accounts set out on an output basis? I do not know whether that is the case now or not. I suspect that even hon. and right hon. Members opposite find that in some areas it is and that in other areas there are alarming gaps. I suspect that there are gaps in precisely in those areas over which one would hope the central budgetary authority had a hawk-like and continuous control system for checking, the objectives, costs and aims of certain divisions and departments. I suspect that the means for checking the continuing validity and the needs for which those departments and agencies were set up are too often missing.
My own prejudice, and I do not hide it, is that more is needed; a more elaborate and better-controlled machinery is needed if data flows of this kind are to exist in Whitehall. Paradoxically, one is arguing, not the rather fashionable view held amongst politicians that there should be a less powerful Treasury, but that there should be a more powerful Treasury. One is arguing that there should be within our Whitehall system methods for ascertaining data about costs and the gigantic and growing range of activities, and mechanisms for questioning those activities and challenging them systematically, so that the data can be gathered and brought before the functional committees for discussion.
It is on that question that I end. I agree with practically everything said by my right hon. and learned Friend the Member for Wirral and by the hon.


Member for Northfield. I echo the appreciation that has been expressed of the fact that the Leader of the House should have afforded us so speedy an opportunity to discuss the Report. I hope that the apparent clash between advocates of Specialist Committees and this new and more systematic and coherent programme of committee supervision will be shown by this debate not to be a real clash. The basic interests of hon. Members in functional committees are the same and, to echo what the Leader of the House said, the desire is to maintain a better and more public balance between Parliament and the public, on the one hand, and the Executive, with all its enormous powers and departments, on the other.
This Report points the way towards an opening up to the public of modern administration in Britain, just as 100 years ago hon. Members sought to open up discussion in this House to the public. Just as that was then seen as the enlargement of public liberties, as the means for avoiding the growth of a remote elite State which all feared and few understood, so I think that the opening up of the Administration to wider discussion through this means is in the same line, and works towards the same cause.

5.25 p.m.

Mr. Austen Albu: I am glad that the hon. Member for Guildford (Mr. David Howell), perhaps rather more than did previous speakers, indicated the really radical nature not only of the proposals made by the Select Committee, but of the changes that are taking place at present in Whitehall, and which the Committee presses the Government to proceed with further.
What has perhaps been overlooked, and this was certainly at the back of my mind during the proceedings of the Select Committee, is that the Committee's report would have the effect of making the House of Commons face up in a more realistic way to the choice that has to be made in the use of scarce resources. That is my answer to those of my hon. Friends who do not like the idea that Government policy should be considered in the form of the estimates.
The truth of the matter is that all Government policy is expressed in the

form of the estimates presented by the Departments and all Government policy involves expenditure of one sort or another. If one wants to propose policies, or wants alternative policies, one has to consider them in the light of the alternative use of scarce resources, otherwise one has the situation, which we so often see, where Members on both sides are able to demand greater and greater expenditure for their own objectives while, at the same time, they are very often asking for less taxation. One of the objects of the Committee structure, and not only that but the proposals made by the Treasury for the presentation of a White Paper on forward expenditure based on functional estimates, is to enable the House better to make choices.
The present system of control of public expenditure is quite ineffective for three reasons. First, because, as everyone now agrees, policy is much more important than candle ends. Secondly, the cash basis of the estimates set out in terms of resources used and not functions performed makes judgment very difficult unless one goes through the very complicated business of trying to collect from the various estimates all the votes which contribute to a particular function.
The third reason is that for a number of years now—and it is extraordinary how out of date politicians can be because this has been going on in the Treasury for a long time and could have been discovered by anyone reading the reports of the Select Committee on Nationalised Industries—Government expenditure is being planned forward for up to five years and the room for change in the estimates in any one year is very small indeed.
On the evidence given to us, as the hon. Member for Birmingham, Northfield (Mr. Chapman) said, the margin may be as small as 2½ per cent. If the House of Commons is to influence policy in terms of public expenditure the House must take account of these changes and also the changes that have been made by the Government's proposals for an annual forecast covering those five years. But if this annual White Paper is to mean anything at all it must be accompanied by an economic forecast over the same period. Otherwise, we do not know what resources the Government estimate will be available, so that any discussion about their use is meaningless.


The other changes have already been referred to by the hon. Member for Guildford—the Fulton proposals: management by objectives, cost-benefit analysis, the presentation of Estimates on a functional basis. These are extremely important changes. We must not assume that their application will be easy, nor must we assume that these methods can be applied in all Government Departments. They will take a long time and will be very difficult to introduce, even if those in Whitehall welcome them with open arms and some parts of Whitehall, if not all, do welcome them.
Considerable progress has been made already. However, I must give a warning to the management enthusiasts, speaking as an old management enthusiast myself but never a management fanatic. Government is not business. There are very complicated techniques, and by no means cast-iron ones, for helping the process of decision-making, but they do not avoid the necessity, particularly in politics—in government—for making social and political judgments.
Anybody who doubts this should read an extremely interesting book on the American experience. Many people have drawn attention to the decision taken by President Johnson that all the Departments in the United States should turn to the use of a system called "Planning, Programming and Budgeting". This system is still in quite an early stage. Anybody who believes that it avoids the necessity for social and political judgments should read a book entitled, "Politics and Economics of Public Spending", by Professor Charles E. Schultz, Director, Bureau of the Budget, under President Johnson. This book not only explains the extraordinary difficulties of applying these methods in a political system, but also explains what the methods are in clearer language than I have ever seen them explained anywhere else.
The question is: how can the House of Commons bring its influence to bear on Government policy as projected in expenditure forecasts? It is all very fine to say that we can have a great debate on the Floor of the House of Commons, but if we do not know what the Government's forecasts are for a particular policy it cannot be a helpful debate. Members must be able to express their views on

Government proposals for the use of resources and be able to suggest alternatives.
The second question is: how can the House of Commons examine the means by which these policies are put into effect and their effectiveness? Here I come to the question of the division between policy and administration. I very much doubt if in government it is possible to draw that distinction. It may be in great issues of policy, such as defence policy and foreign policy, but a large part of Government administration at one level becomes policy at the next, and so on downwards. Policy develops in a department when there is a continuing process of applying major policy decisions in terms of annual programmes.
In education, where Government policy may be to expand the higher education system within the resources allowed by the Treasury, the question is: what is the best way of applying it? It may be by the use of cost benefit analysis as between the binary system and the unified system. Then they must work out the best use of what is left over for the primary and secondary systems. Even here Government benefit analyses can be used—although social as well as economic priorities must be considered. These methods are being developed in Whitehall. The House of Commons knows little about them, but a Committee could discover much more.
The first of the tasks for the House of Commons, that is, deciding between the alternative uses of resources—the great policy decisions—we have suggested should be a major debate in the House of Commons on the basis of the White Paper on forward expenditure. We rejected the idea that this White Paper on the forward expenditure forecasts of the Government should be examined in Committee. We turned it down because here will be found the main political issues and it should therefore be debated in the House of Commons.
The second of the tasks for the House of Commons—that is the examination of the methods by which decisions are arrived at and the control of effectiveness, and so on—is to be performed by the new Committees. I believe that this new Committee structure that we recommend is an improvement on the specialist Select Committees we now have. I believe that


these Select Committees lack bite. They very often wander over a field which is not necessarily of the first importance, very of ten of doubtful Government responsibility. They often produce very worthy reports and have little influence on policy.
This is my own view. These comments do not apply to the Select Committee on Nationalised Industries which, operating on a basis of defined inquiry, has been a useful Committee and has been effective. If Select Committees are to have bite, they must examine the instrument by which Government policy is expressed—that is, the Estimates.
I want, finally, to make two points on Select Committees themselves and how they should operate, because I think that this is very important in this context. First, should a Select Committee meet in public? I know that it is very fashionable to say that Select Committees should meet in public and that Select Committees now do so. I have the very gravest doubts about this. The lay Press—I do not refer here to the specialist Press, to the technical Press, which sometimes has reported some of these Committees quite well—is more of a barrier than a channel of information to the public for what goes on in the House.
This applies particularly to a Select Committee. A professional witness—I I have a very good example in my mind —may give evidence lasting one or one and a half hours in the course of which he may make a rather startling remark. The Press will give that half a column and will completely mislead its readers as to what the witness has said. The system by which the evidence is published when the report is published, so that the Press and the public can see the whole thing at once, is a much better system. I am, therefore, not very enthusiastic about Select Committees meeting in public.
Secondly, I have always preferred that the staff of Select Committees should be servants of the House. I welcome the slight increase which has taken place in the Clerks' Department over the last few years. It is now quite inadequate, but an advance has been made. We have certainly come a long way since the time when the then Clerk of Committees told me that it was not the job of Clerks to draft reports for chairmen.

I prefer experts, too, to be servants of the House. For a number of reasons, this cannot always be so. When it is necessary to use outsiders, it is very important that those outside experts do not over-press their own views or carry on their own battles with the Departments. Their job is to help elucidate material of a complicated nature, not to press forward views of their own. This is important, because otherwise, as has sometimes happened to me, one finds oneself in the position of a devil's advocate and that is not necessarily the right thing for a member of a Committee to be.
I believe that a Committee composed of average Members of the House with some assistance is well able to get at the substance of a matter and very likely to bring more common sense to the task than are some academic experts. However, if good members are to serve on these Committees the Front Benches on both sides must have some more understanding of the work of Select Committees. They do not understand how they work, and this is not very surprising because very few of them have ever served on a Select Committee. I have discovered that since the end of the war only two Leaders of the House or Chief Whips have served on Select Committees. [Interruption.] The exceptions are my right hon. Friend the present Chief Whip, who served on the Estimates Committee for three months, and the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd), who served on it for four years. It is not surprising, therefore, that among those members of the Front Benches responsible for the appointment of these Committees there is not a great deal of sympathy. Until there is, they are not likely to be much more effective than they are at present.

5.40 p.m.

Mr. Ian Lloyd: I start by referring to the extremely interesting speech of the hon. Member for Birmingham, Northfield (Mr. Chapman), who chaired the Committee. I am sorry that he is not in his place at the moment. Perhaps I could begin by having a bit of fun. The hon. Gentleman said that we are allowing the Government to get away with murder. He is a little mixed up, because it is the economy which is alive and kicking and


the Government which is the corpse, and corpses cannot commit murder. Having had my fun, may I say that this is a very serious debate about a most serious subject.
I should like to turn to the central issue, which is the position and place of the House of Commons in relation to the Executive. The Report deals with what is possibly the most important single issue facing hon. Members. It is summarised in one phrase in paragraph 21, in which the Committee recommends that
as new methods of management are introduced in Government Departments, the cost and budget figures most necessary for Parliamentary scrutiny should be published in an appropriate form".
I should like to consider the precise meaning of the phrase "an appropriate form". I may be wrong and perhaps misinterpreting what went on in the Committee and some of the Committee's intentions in its proposals, but my reading of the document suggests to me that "an appropriate form" is what the House has, in large measure, understood to be an appropriate form for the last century; that is, hon. Members are presented in sub-committees, in major committees and ultimately in the House with written documentation of one form or another based largely on verbal evidence, large parts of which may be quantitative. My point is simply this. If we allow our thinking on this subject to be dominated by this concept of the strategy of government in the second half of the 20th century, we shall be making a very grave mistake. I should like to endeavour to substantiate that point.
As practically every hon. Member knows, there exists an instrument known as the computer. Those immediately involved with this machine, whether at the top levels of industry, in public corporations or even in government, are aware that this instrument, and its procedures in handling, analysing and presenting data, is absolutely central to what is understood by the term "executive control" today. I do not wish to introduce outside and possibly irrelevant elements at this point, because we may or may not be interested in public corporations or private corporations; but we are intrested in government.
May I give an example of where it was generally agreed recently that there has been a failure to control expenditure,

very much in the terms of the Report, which refers at the beginning—and it is a remarkable statement—to the House of Commons having exercised a nominal control over part of the expenditure?
Recently, in the Council of Europe, a former Member of this House put forward an analysis of the control, within Europe as a whole, of science expenditure over a very large field. The sum involved was 350 million dollars. It was generally agreed by those immediately concerned with this proposal that the case was very largely made that control over this expenditure, part of which is generated by the British taxpayer, is virtually non-existent. As a result, the retiring Secretary-General put forward the proposal that there should be created within the machinery of the Council of Europe a central computer-oriented machine which would bring together a data bank for the whole of Europe from which, at least in this area of expenditure, an effective degree of control could be exercised. This was endorsed not long ago by the Austrian Federal Chancellor when he addressed the Assembly.
I understand that central to the forward thinking of the Council of Europe, non-legislative body that it may be—and I fully accept that—is the question, where do we bring the computer into the government of Europe, how do we use it in the government of Europe, and what will be the consequences for the members of the Council? Is this House considering, in the detail necessary, in its examination of the techniques which will be necessary, where modern equipment can be used within the House? It may well be that no part or piece of a computer will ever find its way into this Chamber. That may be right and necessary and it may be a conclusion which successive Governments of successive parties reach after having seen and examined most carefully what successive Executives are doing with this central and extraordinarily powerful machinery, which, in my opinion, is tipping the balance as between the Executive and the legislature, not only in Britain but throughout the world, in a way in which it has not been tipped against the legislatures for centuries. This is the key point in my analysis.
If we are to consider how we as Members of Parliament can discharge, not merely in sub-committees but in a far


wider and more fundamental sense, the essential rôle of scrutiny which is our responsibility, can we do it if we are dependent, in a legislative sense, on ex post facto information which, in the business world, accountants are now recognising to be obsolete information about the past, about what has happened and not about what is happening and what is likely to happen? Can we therefore exercise some form of what is known as real time control, not merely or exclusively in the economic field, important though that may be, but in the social field?
I should like to refer to a proposal recently put forward by Mr. Daniel Moynihan to the United States Congress on this subject. He said:
Over the next century, techniques of accounting and budgeting developed very rapidly, and in 1921 Congress established the General Accounting Office to keep track of federal expenditures. I would like to suggest that Congress should not establish an Office of Legislative Evaluation in the G.A.O. which would have the task of systematically reviewing the program evaluations and 'PPBS' judgments made by executive departments".
I am not sure that the Committee had in mind something close to this proposal. But no such control will be effective unless Members of Parliament, members of Congress or members of the Council of Europe—whatever the legislative body may be—have personal access to what I would describe as the non-confidential data banks of the executive.
Within this building, or within some building in which Members of Parliament normally congregate, there should be data terminals having access to the official data banks of the executive which Members of Parliament may use. This may raise many complications and many problems—I am aware of that—but I do not think that, even if we had access to everything except the confidential, we would be wholly satisfied. But without it, wholly admirable though these proposals may me, and though they will bring our existing procedure much more effectively to a position in which it can control what has happened in the past and will enable us to be much more efficient legislative auditors, it will not make us more effective and more responsible legislators.

This may seem a strange concept to the House, because it is probably fair to say that the majority of men of our generation—that is to say, almost anyone over the age of 25—have not been familiar from their early education onwards with the idea of what the computer means to society. Very few of us can have a fundamental understanding of the revolutionary change in human affairs and in human government which has resulted from man's ability to process, to quantify and to analyse immediately and readily vast masses of data on a scale which has hitherto been impossible.
In reacting to this proposal, or to any other proposal for modernising the House of Commons and making it a presentable institution to the great British public, until we have a more detailed understanding and are prepared to cast proposals within this more fundamental awareness of what the computer means to us, we will not have the right to say that we have done what we should do and have produced a House of Commons able magnificently to govern Britain in the second half of the twentieth century, which is what we are being asked to do.

5.51 p.m.

Mr. David Marquand: I hope that the hon. Member for Portsmouth, Langstone (Mr. Ian Lloyd) will forgive me if I do not follow him down the exciting paths which he trod. I want to go back to the Report and to ask one or two specific questions of my right hon. Friend before commenting on other matters which have been raised.
The Leader of the House said that he welcomed most of the recommendations about what would happen on the Floor of the House. He did not, however, mention the recommendation in paragraph 15 that consideration should be given to publishing estimates of the growth of the economy in years four and five as well as years one to three. Will my right hon. Friend tell us what view the Government take on that recommendation?
The recommendation is extremely important. We are talking about debating years four and five. It is clear from the evidence in the Report and from what we have been told by Treasury officials and by Ministers that it is only for years four and five that real choice


exists. If the debate on the White Paper is to influence future decisions of Government it will have to be a debate about the prospective expenditure in years four and five. There can be no intelligent debate about the level of public expenditure five years ahead unless an authoritative estimate of the total resources available in the economy five years ahead can be made available.
My right hon. Friend will recollect that he said in the Committee that an assumption could be made that the estimate for years one to three would continue on its existing path for years four to five. If that is the case, why cannot that information be put in print? What is the inhibition? I know that when economic forecasts are published the Government are often attacked because what was really a guess has turned out to be wrong, and in retrospect it is regarded as a commitment that has not been honoured, whereas it was nothing of the kind. That difficulty exists about publishing any forecast. But if the changes we are talking about are carried out, more and more forecasts will be published in any case. If forecasts are to be published for years one to three, what is the inhibition about publishing forecasts for years to five? I appeal to the Government to think about this in a generous spirit, and I ask my right hon. Friend to say what is the Government's view.
Will he also give us a little more detail than did the Leader of the House about the recommendations on output budgeting. I am delighted that the Leader of the House welcomed the Report. I do not want to go into complicated semantics on output budgeting, but the hon. Member for Guildford (Mr. David Howell) put his finger on its significance in his most important and interesting speech. This is absolutely essential if we are to have effective scrutiny of public expenditure by this House. The evidence given by an official explains this very clearly. He says at paragraph 630 of the Minutes of Evidence that the Votes which are debated by the House express expenditure in terms that are not of interest to hon. Members and not of interest to the general public:
They do not fit and they do not present themselves in terms of the problems with which they are interested. Doctors do not

talk about whatever the Vote talks about; they are interested in expenditure on geriatrics, midwifery, or whatever the particular thing is that they are arguing about. Now, it seems to me that, generally speaking, the kind of framework which is set out here in this feasibility study…
That is a study which was carried out by the Department of Education and Science on output budgeting—
would present both the House and the public at large with the kind of framework in which they could see, if one were debating, let us say, health expenditure, not just money for hospitals, money for the executive council service—hospitals costing £1,000 million a year, and the executive council service something like £300 million a year. It is not easy to do, but I think it can be done, and it would then ideally be a study in which one was talking about the amounts, not spent on doctors or on supporting services, but on dealing with the illnesses of old age, respiratory diseases or whatever it might be.
This is exactly the point. This is what the general public is interested in. These are the choices which hon. Members want to know about and which are not made clear in the existing Estimates. This is why output budgeting is so important.
One of the officials who gave evidence to us said that over five years a large part of the Whitehall machine will be able to present output budgets. Will my right hon. Friend give slightly more detail about that forecast? Will he say how far the process has gone, which Departments are carrying out feasibility studies and how far the work is progressing?
May I say a word about the controversial aspect of the Report dealing with the Committee structure. This is an absolutely fundamental and integral part of the Report. I could not agree more with what the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) has said. We are putting forward a two-stage process, both stages of which are equally essential to the success of the endeavour.
The Committees which we propose would issue reports which would provide vital information for the following year's debate. As time progressed the debate on a White Paper would become more informed and effective because of the work of the Committees. A debate which took place without earlier work by Committees would be that much less valuable.
The Committee structure is an integral part of our scheme. If the Government accept the first part of the scheme, it is essential that they should also operate the


second part. I am not saying that every single detail of our proposal should necessarily be adopted in the form suggested by the Committee. There are tentative suggestions as to which function should be covered by which sub-committee. But the central idea is fundamental.
There seems to be a fundamental misconception in the back of the minds of some of our critics. It is untrue that we are proposing a vast new network of Committees. We propose to rationalise the existing, messy, haphazard and incoherent structure which has grown up over many years without any proper strategy. Adoption of the Report would not mean that any new burdens would be placed upon hon. Members. The number it is at present. The burden will be more of hon. Members engaged in Select Committee service would be no greater than efficient, more interesting and worth while, but it would not be any heavier.
It is also untrue that the kind of structure which we propose would lead to a less effective scrutiny of the Executive than is provided by Specialist Committees. That is a complete misconception. The purpose of Select Committees of the House is not so that hon. Members can take part in an interesting academic seminar about problems of technology, education, and so on. Their purpose is to provide Parliament with some countervailing influence to the tremendous growth in the power of the Executive over the past half century. It is no criticism of the Specialist Committees to say that, although they have often produced interesting studies—and the report of the sub-committee which looked into student unrest is full of interesting material which will provide fascinating reading for future social historians—they have nothing whatever to do with the purpose of Committees of this House, which is that of controlling the Executive.
If one wishes to control the Executive, it is essential to have the key to the executive door. The key is that of financial control. It is felt by some that Committees which are geared to financial control would be dull, drab, specialised, technocratic Committees scrabbling away at a lot of accountancy details and unable to put questions on policy. This is the opposite of the truth. There is no policy of

government which sooner or later is not translated into expenditure. If one wants to investigate policy, then control of functions over expenditure gives the best possible route to this end.
The Specialist Committees live with the sword of Damocles hanging over their heads. We know this from the practice of the last three years. If Specialist Committees become obstinate, difficult or obtrusive—

An Hon. Member: Or effective?

Mr. Marquand: Yes, or even effective they get wound up, or would not be reappointed. If the structure which we propose is adopted, it will be very much harder for any future Government to say "We do not like this obtrusive and effective committee so we will wind it up". If a Committee structure were firmly established, they would not dare to adopt such an attitude—or at least it would be much more difficult for them to do so since they would incur much greater odium if they did.
It is felt by some hon. Members that to develop and strengthen the committee system would in some way weaken the authority of the Floor of the House. The proposals in our Report show that this argument is quite fallacious. Our Report proposes a two-stage scheme. We should like to see effective debate in the House, and much of the Report deals with methods of making such a debate effective.

Mr. Eric S. Heffer: Would not my hon. Friend agree that such a debate should not be composed merely of members of the particular Committee whose Report is before the House, and that there is an inherent danger of such debates if one has a system of Committees?

Mr. Marquand: I take the point and respect the feelings behind it. I was just about to resume my seat and to allow other hon. Members to make their contribution.
I conclude by saying that in the annual debate we do not propose a debate on the Report of the Committee, but a debate on a Government White Paper. Such a debate is ten times more effective if it has behind it the work of a system of committees such as we propose. The two things are part and parcel of the same idea.


An effective Chamber must have behind it an effective committee system. Hon. Members who took part in a debate would have the full information before them since the Committees would have been able to prise out in a detailed way secrets which the Government would like to keep hidden. Such information would make them more able to make an effective, sometimes even damaging, contribution when such a debate takes place on the Floor of the House. These matters are indissolubly linked. If hon. Members want a more effective Chamber, they should vote for the scheme suggested in the Report.

6.8 p.m.

Mr. Eric Lubbock: It is no wonder that every hon. Member who has so far taken part in the debate has been in favour of the Report of the Select Committee on Procedure, since only one hon. Member who has spoken so far was not a member of it. It would be a great deal more valuable if hon. Members who were on the Select Committee would take the opportunity of hearing the views of some of those who were not on the Committee and who may be more critical of the Report than any of the views which we have heard so far. Personally, I consider this to be a very bad Report and I shall explain why.
First of all, I should like to endorse what many hon. Members have said about the Green Paper and the improved form of public expenditure presentation. This is admirable, and what was said by the Leader of the House was most welcome to the Liberal benches, as I am sure it was to every hon. Member who has at heart the interests of the House. What I criticise is the rôle of the Estimates Committee in its new form and what would happen to the specialist Committees which were set up in the post-1966 period as a result of the new structure.
The hon. Member for Ashfield (Mr. Marquand) said that he thought the Report of the sub-committee on education and science which dealt with student unrest was of no value to the House.
I could not agree less. This is a very serious disparagement of the Report of the Select Committee on Education and Science.

Mr. Marquand: The hon. Gentleman his misunderstood me slightly. I did

not say that it was of no value. On the contrary, I said that it might be of great value, though not from the point of view of controlling the Executive.

Mr. Lubbock: The hon. Gentleman said that it might be of value to social historians in the future. But I say that it is of value to this House. One of our central political and social problems today is to know how to cope with unrest of various kinds, especially with student unrest, to know what are the causes and how we are to find remedies. If that Select Committee has thrown some light on that and has not been able to turn its attention to the detailed finances of the Department, I have no quarrel with it.
While the hon. Gentleman was speaking, I was looking through the evidence given by the Chairman of that subcommittee, who was pressed to say why he had not been looking at the Estimates and had gone off into such a bizarre subject as student unrest—[Interruption.] Everything that the hon. Member for Birmingham, Northfield (Mr. Chapman) said implied that these Committees must be concerned with the expenditure of Government Departments and nothing else. He said, for example, that he wanted to see the Estimates Committee rebuilt into a form suitable for examining Government expenditure, and he suggested that one of its first acts should be to call the chief accounting officers of the Departments concerned. He spoke about the cost-benefit studies of siting the third London airport as being a suitable topic for one of the Committees to examine. He said that the Committees will be inquiring into expenditure, and that if some policy probing becomes necessary it will be done, giving the impression that that would be a secondary objective of the new-style Committee on Expenditure.
I object strongly to that. I want to see the Select Committee system developing not in financial terms but in terms which will enable the House to come to grips with policy of a completely nonfinancial nature.

Mr. Chapman: The hon. Gentleman has failed to recall the latter part of what I said. After they have gone through this discipline of applying themselves to expenditure, they will go on to the kind of inquiry which is carried on now in the Estimates Committee and the Specialist


Committees, but it will be set in the framework of beginning the year's work by examining the total output, aims, objectives and expenditure of the Department concerned.

Mr. Lubbock: The hon. Gentleman is getting me confused. I have read the Report, and I thought that these subcommittees were meant to be functional. Now he says that their primary task should be to examine what the Government Departments are doing.
He said the task of the Select Committee would be the beginning of a management audit. I do not want management audits. There is a place for them, but they should not be the principal task of the Select Committee. If it were, I agree with the hon. Member for Ashfield that the Committee would have a very dull job. Apart from accountants, very few hon. Members would have any interest in belonging to a new Select Committee of this type.
The Report says that such a Select Committee should be concerned with discussion of the Government's expenditure strategy and policies as set out in projections of public expenditure several years ahead; examination of the means, including new methods, of management, being adopted to implement strategy and to execute policies as reflected in annual estimates of expenditure; and retrospective scrutiny of the results achieved and the value for money obtained, on the basis of annual accounts and related information from Departments on the progress of their activities. Those three components of the objectives of the new Committee have nothing to do with policy as such, and that only came in as an incidental both in the Report and in the speech of the hon. Member for Northfield.

Mr. Chapman: If the hon. Gentleman looks at paragraph 35, he will see there:
The task of each Sub-Committee would be three-fold:—
(a) It should, first, study the expenditure projections for the Department or Departments in its field…
(b) It should examine in as much detail as possible the implications in terms of public expenditure of the policy objectives chosen by Ministers and assess the success of the Departments in attaining them,"

and so on. He cannot maintain that we want to keep these Committees away from policy.

Mr. Lubbock: The hon. Gentleman's approach is entirely different from that of the Select Committee on Science and Technology, of which I have been a member since its inception. I dare say that it is different from the approach of the Select Committee on Education and Science as well. We have not examined the implications in terms of public expenditure of policy objectives chosen by Ministers. We have suggested a number of policy objectives ourselves. We have certain ideas of our own. That merely reinforces my argument that the hon. Gentleman wants to demote these Committees and leave them with as little to do with policy as can be fitted in with the wishes of hon. Members who serve on them and not make them too unattractive.
That is not my only objection. I have discussed the tremendous emphasis which the hon. Gentleman has given to the question of money in his Committee. He lays great stress on the Estimates of the Departments and takes them as the starting point by examining the chief accounting officers. However, the next point which is of equal importance is the size of the task which he intends to impose on a sub-committee of only nine Members.

Mr. Peter Emery: Today's discussion is proving to be a debate in the best sense of the word, but there is one point which needs clarification. Paragraph 35 of the Report sets out the tasks of each of the sub-committees. However, in paragraph 34 one sees the proposed order of reference of each sub-committee. It says:
To consider the activities of Departments of State concerned with [naming a functional field of administration] and the Estimates of their expenditure presented to this House; and to examine the efficiency wih which they are administered.
That seems to exclude—

Mr. Speaker: Order. This intervention is suspiciously like a speech.

Mr. Emery: It is not intended to be. That seems to exclude what has been debated across the Floor of the House—the specific item of policy with which the hon. Gentleman is as concerned as I am.

Mr. Lubbock: I think that I have the hon. Gentleman's point. He is asking what is to happen if an item in which the sub-committee is interested does not appear in the Estimates. I can give the House several examples of that occurring in the context of the Committee on Science and Technology. If one refers to the Report of the Sub-Committee on Carbon Fibres, there is a good deal in it about the policy on the licensing of know-how to companies in the United States. However, one will find nothing of that in the Estimates of the Ministry of Technology. Yet it was of vital national interest.
Another example is that of the subcommittee which has been reconsidering the nuclear reactor programme of the United Kingdom. That Report recommended that the Minister of Technology should consider guaranteeing the contingent liabilities of electricity boards which brought into operation new types of reactor systems. We could look in these forward expenditure projections to the next four or five years and, unless it was already Government policy to offer these guarantees to the electricity boards, nothing would appear. This was a suggestion which the Select Committee was making for the consideration of the Minister of Technology, but now he has to consider it in his dual capacity of Minister of Power as well.
If we started from the Estimates Committee we would never consider the matter in the first place. That is what I am trying to get across and what the hon. Member for Honiton (Mr. Emery) has confirmed.
I come now to the second point, which is really very difficult for the hon. Gentleman to answer, namely, how a sub-committee of nine members will cover such an enormous sphere. I can speak only from my own knowledge, but the Select Committee on Science and Technology, which consists of 15 members, has such an enormous task that it has been found necessary to divide it into sub-committees for some of its investigations and still it has not been able to cover even a fraction of the area. Yet the hon. Gentleman proposes that a committee of nine members will deal not only with technology, but also with industry, manpower and employment. I do not see how it can possibly go into the subject in

the detail that he suggests. I suppose it is feasible to divide a committee of nine members into two sub-committees of four and five members respectively. But then problems of political balance arise with the even numbers on the committee of four. Therefore, I think that it would tend to work in practice as a whole committee, as the Estimates Committee does. It does not divide into numbers smaller than six or seven, although the hon. Gentleman may be able to correct me oh that.
The work of a committee of nine members covering the enormous spectrum of interests that the hon. Gentleman named will be superficial in the extreme, and as a result of its work there will be no control by this House over the activities of the Departments concerned.

Mr. Robert Sheldon: The hon. Gentleman seems to be drawing a relationship between the size of the Committee and its effectiveness. Would he accept that there are certain-congressional committees in the United States with great power which consist of three members? It depends on the officials allocated to the Committees.

Mr. Lubbock: If the hon. Gentleman had been listening, he would have heard me say that I thought it would be difficult to have Committees consisting of three members because of the problem of political balance.

Mr. Sheldon: No.

Mr. Lubbock: If the hon. Gentleman says that he wants to make this as an additional recommendation, it does not appear in the Report. Theoretically, Committees of nine could be divided into three sub-committees of three members. But I presume they would need to consist of two Government and one Opposition Member, so that a lot of Government back benchers would be needed to man eight times three sub-committees with two Members on each. This would be a much larger total than those who serve on the Estimates Committee, which is to be replaced. I am in favour of small Committees. If the political balance problem can be sorted out, then all strength to the hon. Gentleman's arm.
I come now to my third criticism. Specialist Committees have built up good relations with the outside world—at any


rate, those that have been allowed to continue in existence for longer than one Session. If they are to become subcommittees of an Estimates Committee under a new name, no one will take them seriously.
I do not want to make a great thing about the prestige of the chairman of a Select Committee. Taking the Select Committee on Science and Technology as an example, the hon. Member for Bristol, Central (Mr. Palmer) is heard with respect wherever he goes. People know that he has been doing this job since the inception of the Committee, and before that he was Chairman of the Parliamentary and Scientific Committee. The hon. Gentleman proposes that he should be called the Chairman of the Sub-Committee on Technology, Manpower and Employment of the General Purposes Committee of the Expenditure Committee, or something of that kind. I do not think that the outside world will take such a position nearly as seriously or respectfully as the position of someone who is Chairman of the Select Committee on Science and Technology. The same applies to the other new specialist Committees which have been established with our full support.
I turn now to my final criticism of the hon. Gentleman's proposals. One of the most successful features of what I might call the post-Crossman Committees is their ability and determination to get stuck into policy—sometimes to the great embarrassment of Government Departments. We need only remember the first examination of the Agriculture Committee into the Common Market to appreciate that.
With shortages of manpower both in the Clerk's Department and among hon. Members willing to serve on these subcommittees, there will be a danger of creating so many new Committees if we go on with the specialist system that we embarked upon under the Crossman administration that we would not have enough people to go round and the committees would not do their jobs thoroughly. Therefore, I should like to propose a different solution. I suggest that we wind up the Estimates, Nationalised Industries and Public Accounts

Committees and that we redistribute the resources to man as many non-Departmental functional Committees of the Crossman type as we can.
I agree that it is absurd to claim that the Estimates and Public Accounts Committees give this House any real control over expenditure. The Comptroller and Auditor-General could still make reports to the House on any items that he thought should be drawn to our attention. The House could then decide whether any of the allegations of the Comptroller and Auditor-General should be referred to the appropriate specialist sub-committees. For instance, advanced gas-cooled reactor royalties were considered by the Public Accounts Committee in its last report, as well as army boots and about 50 other matters. The report of the Comptroller and Auditor-General would, under my suggestion, be referred to the Select Committee on Science and Technology which would decide whether to consider it and to report on it to the House, or it might take note of it and leave the House to take such action as it thought fit.
It is absurd to pretend that the Select Committee on Nationalised Industries, which is to be kept in being under these proposals, can examine a range of industries from Cook's Travel to the British Steel Corporation. A vast spectrum of industries comes under its scrutiny now which would be far better dealt with by functional Committees, not of the kind that the hon. Gentleman wishes to create, which are components of a much larger Committee, but which are independent and as powerful in their own right as we have now.
We, on the Liberal bench, have always pressed for the extension of the Select Committee system to redress the balance of power between Parliament and the Executive. We agree that that should be the task of this House. That far we go with the hon. Gentleman, but we do not think that he has done it in the right way. If this Report is accepted, the Executive will have no difficulty in keeping the watch puppies absolutely docile and we will be creating a new piece of House of Commons bureaucracy which deals mainly with the Treasury—and we know how good that is at avoiding awkward questions.

6.29 p.m.

Mr. John P. Mackintosh: It is a tragedy that such a sincere and genuine parliamentary reformer as the hon. Member for Orpington (Mr. Lubbock) should find himself in a clash with the Select Committee on Procedure, which is proposing one of the greatest parliamentary reforms which has come before the House.
I ask the hon. Member for Orpington to look at the points which some of us got into the Report, particularly the end of paragraph 38, where we made it clear that the position of the Specialist Committees would have to be looked at, as it is being looked at now by the Government, but we did not say that they should be abolished. As a member of the former Agriculture Committee and now of the Scottish Committee, I would deplore any such move.
I think that there is room for both systems. I ask the hon. Member for Orpington to think about the whole question of the control of finance and to realise how completely this has slipped out of the purview of the House. The whole approach of the 19th century as devised by Mr. Gladstone in his "circle of control" was that the House debated Estimates—they could be cut or changed in the House. Then the money went to the Treasury, and the Treasury watched over expenditure during the year. When the money had been spent under the detailed scrutiny of the Treasury, the Public Accounts Committee completed the circle by asking, "Was it all spent exactly as the Appropriations Act set out?"
That system is dead, for a whole series of reasons. First, it is wrong to look at this House as an anti-Government, anti-Crown organisation of the 19th century type simply interested in saving money. We are now interested in a much more positive idea, namely, whether public money is spent in the best interests of the public, whether we are getting the best value, whether it is being properly managed, whether it is being shared in the right way between private and public consumption, whether in public consumption the money is properly divided between health and housing, the subdivisions of health, and so on, as we would want it to be.

During the battles that take place in the Executive this House can beat at the outsides of the doors of the Government but never get near to the decisions. We can never get near the operative point at which the decision is made whether more money should be provided for this, or less for that, and so on. We cannot do this because of the quite proper modern system of a rolling programme of public finance which has been adopted since the Plowden Committee's Report. By this we have a rolling programme for five years ahead with the hard decisions being taken, as the Green Paper said, for the focus year, year three.
Before we turn to the question of what kind of Committee system is best, what we as a House have to do is to devise a new circle of control which will bring the House, and through us the public, to the key decisions as they are being taken. The Committee proposes that in the first instance there must be a debate in the House on the White Paper on the options put before us for this five-year programme. If—and this is critical and I ask the hon. Member for Orpington to think about how this can be done—scrutiny is to be informed and effective, we must sub-divide the Estimates into chunks, departmental or otherwise and a tremendous amount of work will then be required each year to put before the House the crucial changes that have taken place since last year, and to put before the Houes developments in expenditure which will have major policy repercussions, but which would slip past without Members noticing if this detailed work was not done.
It is a reasonable task for Committees of nine members specialising in a certain sphere to look every year at sections of the Estimates—as the Appropriations Committee of the United States Congress does—and say what is different this year from last year, what has changed, what is creeping in now that will mean that we cannot raise the school-leaving age in X years, what is coming along that will prevent the National Health Service from being changed if the number of pensioners increases, and so on. There was a row earlier in the Session when the Secretary of State for Social Services announced that he had introduced a charge for teeth and spectacles to enable


him to rescue a number of comprehensive school projects. That decision was water under the bridge when we got to know about it.
Things like that go past us, and we need this detailed scrutiny of sections of the Estimates so as to make the annual debate in the House of Commons a meaningful and active operation. Our circle of control will be complete if at the end of the year the Public Accounts Committee looks at public expenditure more from the point of view of value for money than from the point of view of any detailed question of candle-ends, as it used to do under the old system.

Mr. Heffer: How does my hon. Friend think the establishment of the Committees being proposed will make any difference to the kind of decision that was taken about teeth and spectacles and the two comprehensive schools? We would still be faced with a fait accompli. We would have to discuss the decision after the event.

Mr. Mackintosh: I am grateful to my hon. Friend for his intervention, but the point is that these decisions will be opened up for a certain time ahead, namely, the operative period for which the ceilings are being set.
A ceiling is set every summer for the total amount of public expenditure on health, welfare and education two or three years ahead. We would be in a position to discuss whether the ceiling was correct, or whether less should be spent on defence and more on some other matter. It is hopeless to come to the matter when everything has been settled and then have to beat our heads against a brick wall of Ministerial resistance in our efforts to get the thing altered even in one slight degree.
There is one matter in the report about which I feel unhappy and it touches on what my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) was saying. It is a pity that the decision was taken to publish the White Paper in November. I questioned the Chief Secretary on this matter in the Committee. Deciding to have it in November means that the decisions for one year have been taken, and it is only years four and five ahead that are open to

this kind of control or discussion. Perhaps I should not say "control", but rather influence by the House.
Decisions are taken in June and July every year on the Report of the Public Expenditure Survey Committee. We as a House play no part in this. We do not know the issues involved. We do not know what is happening. I recall the tremendously embarrassed feeling that I had as a back bencher in the summer of 1966 after the intention to cut public expenditure had been announced on the Floor of the House. It meant that the public expenditure survey, particularly as from year three ahead, was profoundly altered. We could sense that this was going on, that these critical decisions were being taken, but we knew nothing about them. We heard rumours, and as one passed the Ministries in Whitehall one could hear thumps and bangs and perhaps find a Permanent Under-Secretary lying bleeding in the gutter, but one could not find out what was going on.
Under the present proposals, the White Paper would come out in November, and if it was then compared with what happened the previous November, we could see what had happened. I wish that the Government had decided to publish the White Paper in April or May, when the options for year three were still open. We would not be deciding for years four and five, but for year three as the closest area open to choice and where influence could still be exercised.
With that reservation, I welcome the report. It would be a tragedy if the loyalty which the hon. Member for Orpington and I have for the present Select Committees and the value of their work should be thought to mean that one does not need this detailed financial scrutiny of the White Paper with the work of the Committee on Expenditure so that we can make these various tables comprehensible to the House.
This report goes to the heart of most of our problems in this House, because, if we are to proceed with Select Committees as well as this Committee on Expenditure, we shall have to do something about providing facilities for Members. We must make it possible for Members to work in a proper way, with proper information. We must make it possible for them to work with their secretaries. I have found


that being on two Select Committees at one time is a fantastic burden. I do not think that anyone can do this work and handle the necessary documentation on the old amateur basis.
The staff of the Committees must be improved beyond all measure. I agree that the staff and the specialists should be servants of the House, but it is not sufficient to expect a clerk of the House, however brilliant, hardworking and assiduous, to cope with two Specialist Committees as well as spend time on other business and the Council of Europe as we have had in the past. We need a larger staff. They need to be adequately equipped. We need a whole new approach to the functions of Members and this Chamber.
This is not a purely anti-Government pressure. It affects the balance between the Executive and the Legislature, but in many ways this helps the Executive, because the Treasury realises that if the House is properly to debate public expenditure we must not be left outside declaiming and banging against decisions taken two years ago. If we know the options, as reasonable people, we can help to maintain a balance between expenditure and private consumption. If we claim more expenditure on one topic, it must mean less for another.
Even further, in respect of the whole set of reforms in the Civil Service listed under "accountable management", of the idea of giving the Civil Service and Government Departments more budgetary power and more independence and of trying to produce modern methods of management in the Civil Service, all this will develop only when we rethink the question of parliamentary control. As long as our control comes from one Minister down the chain of command from Permanent Secretary through a hierarchy of officials, we shall never get a willingness to delegate authority in the Civil Service, and to create separate centres of authority unless we can devise a new method of parliamentary control through the Committee system and recognise that a Minister does not take all the decisions, that many of these decisions which are taken totally non-politically by officials, the House might want to review from time to time.
The report gives the House a chance to get back into public expenditure con-

trol, a field which we have been out of for 30 or 40 years. It gives the public a chance to understand what are the issues in domestic financial policy facing this country. It gives the House a chance to reform its Committee system and it allows Members to see that the reforms in public administration proposed by the Fulton and other committees can be implemented with a proper measure of parliamentary control.
It would be a disaster if we lost all this simply because we disagreed about what is to happen to certain Specialist Committees.

6.43 p.m.

Mr. James Ramsden: I am not seeking to wind up this debate from this side of the House; indeed, we shall not have a formal winding-up speech. I intervene because I want to say something about the Second Report on the Form of the Defence Estimates. I need not take long about it. I apologise to the House for interrupting the thread of the main debate which is devoted to the First Report, but this will give hon. Members time to get their breath. I wish to put one or two specific questions to the Chief Secretary, and he may like a moment or two to prepare his answers.
The Second Report deals with a new form of presentation of the Defence Estimates. I understand that the Amendments which the Leader of the House moved are necessary so that effect can be given to the Government's proposals. The proposals are brought forward at the wish of the Ministry of Defence and the Treasury and the Government and have now, after certain vicissitudes, the approval of the Select Committee on Procedure. The only concern of hon. Members on this side of the House is that by putting into effect the proposals for a new form of Estimate there should be no curtailment of the opportunities of hon. Members on either side of the House for full and proper debate of the Defence Estimates.
I have in mind not only the convenience of the Front Benches, but perhaps more particularly the individual points of view on defence which are often found on the back benches, and in connection with which one cannot but mention, with regret, the late Mr. Emrys


Hughes. There is very much of a backbench interest in this question which must be preserved.
At the moment, we have the two main days of general defence debate. I take it that that will continue. We then have three Service days, which at the moment arise upon the Estimates of each Service, and which I take it will also continue but will arise either on Vote A or on the split Vote 1 to which the Leader of the House has referred. The only point about this is that it would be the wish of my hon. Friends and myself that there should continue to be three individual Service days, that is, a day for each Service.
In theory, with the increasing functionalisation of the Ministry of Defence it might be more logical and tidy to have Service Estimates debates by functions—personnel on one day, equipment on another and something else on the third day. That would be difficult for the House as a whole, and we should prefer to continue to debate these matters Service by Service, as hitherto.
I come now to the question of the fourth day. At the moment, the procedure is that the Government need money for the Services for the beginning of the financial year and, therefore, they put down certain votes—usually the big ones, which will produce for them enough money. Accidentally, they are usually useful to the House, because they are generally the ones with a live political content.
The order in which the Votes are taken is customarily for the Opposition to choose, but the effect of this procedure has been that hon. Members anywhere in the House, with or without the collaboration of the usual channels, can raise detailed points on Service administration on these Votes without having had to give notice. It has been open to those Members who have raised them to obtain answers, because the Ministers have had to be in the House to be responsible for their Votes.
This has been an important opportunity for back-bench Members, and it has been used. What we really want is an assurance that with the new form of fourth day arising out of the Defence Vote on Account things will be so

arranged that these opportunities will not be lost—that it will not be necessary, in order to discuss a detail of Service administration, to have given prior notice; that the Ministers responsible will be in the House and, from the point of view of the House of Commons and hon. Members on both sides, that opportunities for debate will in no way be restricted through the changed form of presentation of the Estimates. I expect that the Chief Secretary will be able to give us that assurance, which clearly was the burden of the Committee's report.
On the recommendation of Sub-Committee A the Leader of the House said that he was accepting one—the splitting of Vote 1, on pay. Are the Government also accepting the other two, that is to say, the recommendation that tables giving information about the Estimates on a single Service basis should be published, and the recommendation about setting out—as is now done—as an appendix to the Defence Estimates the composition and responsibilities of the various Service boards, including the Defence Board?
We put that in because it is difficult to find out what goes on in the Ministry of Defence. It is interesting to have this information. Votes still have to be built up from the bottom to some extent on a Service basis. The public should know those who sponsor them and are responsible for them. That is all that I want to say. I hope that the Chief Secretary can give us those assurances without any difficulty.

6.48 p.m.

Mr. John Mendelson: I wish to refer straight away to the point raised by the Chairman of the Committee when he addressed the House, concerning the functional subcommittees proposed in the Report of the Committee on Procedure and the references that he made to the existing Select Committees and the future burden on them. The crucial point was touched upon by him when he talked about policy and administration, including expenditure. When my right hon. Friend the Chief Secretary interrupted him at one point, asking whether he was making a distinction between small matters of policy, or matters of small policy on the one hand and matters of large policy on the other, or between administration,


on the one hand, and policy making on the other, he gave a reply—probably the best that he could give—which admitted that certain matters of policy would be within the circumference of the work of these functional sub-committees.
When, later, on, he turned in my direction and tried to reassure me that they would not usurp the sort of debates which I want on the Floor of the House, my hon. Friend the Member for Lewisham, West (Mr. Dickens), who was then sitting beside me, intervened. The Chairman of the Committee tried to reassure him equally, but I think that he failed to reassure either of us. That is only natural and I think that his argument broke at that point.
My hon. Friend the Member for Lewisham, West suggested, using the example which the Chairman had himself introduced, that these functional subcommittees should not only have the power to debate where a new airport should be put, but also whether there should be a fourth or fifth airport, and that is a decision on major policy. The answer which my hon. Friend the Member for Lewisham, West wanted, obviously, was that they should have full power in that respect.
I am very apprehensive about these proposals, because I believe that they are moving in the wrong direction. However much the Chairman of the Committee might counsel my hon. Friend and his colleagues on the Committee that they must be very careful in the beginning and not run too fast and thus arouse the suspicions of those of us, I take it, who object to these proposals, when the work actually starts, there will be a logic of events in the work of these functional sub-committees which will propel them inevitably in the direction of becoming policy-making committees or attempting to be policy-making committees.
The Chairman also used a phrase which only tended to confirm my suspicions. He talked about a "State of the Union message". Although, a couple of sentences earlier, he had said that we had no reason to be worried that he wanted to move us in the direction of the American experience, a little later he used the term "Appropriations Committee"—

Mr. Chapman: No, I did not.

Mr. Mendelson: I beg my hon. Friend's pardon, but the term was used by my hon. Friend the Member for Berwick and East Lothian (Mr. Mackintosh): he talked about an Appropriations Committee.
The use of those two terms of course means that we are asked to move in the direction which I and others who agree with me do not wish us to move. It is, therefore, important to examine briefly the American experience. I do not not want to quote the authorities, although in future perhaps they should be quoted, probably when we have a two-day debate on some of these matters, but the American authorities are of one mind on this—both academics and people who have served in the Houses of Congress. My right hon. Friend the Leader of the House will know this. They believe that the development of powerful subcommittees of the Appropriations Committee has killed debate on the Floor of the House of Representatives. There is no dispute about that. I can easily carry all hon. Members with me on this proposition.
Moreover, it has led to the creation of first and second class Members of Parliament. The experience has been along these lines. There is a sub-committee of the Appropriations Committee which becomes very powerful and, as a result, the head of the executive department goes to great lengths to have close and chummy relations with as many as possible, preferably a majority, of the members of that sub-committee. He will address them, either in executive session or in open session, and will present to them three types of information. The first is ordinary information, which may be published in newspapers, so there is no obligation there on them to secrecy. Second is the "grey" area information. He says to them, en passant."I would rather you did not talk about this, but it is not actually secret".
Then there is the secret, or classified, information. He asks that they must, under no circumstances, talk to anyone else about that information, including their own parliamentary colleagues. Then, on those rare occasions when there is a debate on this matter in the full House of Representatives, these members of the Appropriations Committee say, "We


know much more about it than the rest of you, but of course we cannot reveal it."
I have very great forebodings that, of course not tomorrow afternoon or even in one Session of Parliament, but if we allow this system to be introduced, as the years go by, we will find ourselves in the same position, which will be very dangerous to the democratic process of the House of Commons.
I will come in a moment to controlling expenditure and the link between expenditure and policy, but the essential sanction in this House is, today, in spite of some of the academics who have recently written books to the contrary, the same as it has always been. That is, the threat from the members of the House of Commons to overturn the Government's policy.
A simple example happened last night, on what was regarded as a moral issue by many hon. Members, and in which the Chairman of the Select Committee himself was prominently engaged. All honour to him. I was on his side and I am glad that he had some success, but he did not achieve this success tucked away in some Committee. Nothing happened at all, so far as the Minister of Agriculture was concerned, until last night. He had not given way anywhere along the line. He had had meetings of a private character and of a semi-private character and he had stood like a rock defending the decisions which he had already made as the head of a great executive Department. My right hon. Friend the Leader of the House knows that this is true. The Minister only shifted at the end of the debate, when defeat was staring the Government in the face, because everyone knew that, if he had not done, the Amendment of the hon. Member for Gillingham (Mr. Burden) would have been carried with a good majority. Everyone knew that they were ready to vote for it and that is the only thing that made my right hon. Friend shift.
So there is no alternative. The only sanction which our democratic Parliament has is the threat of a hostile majority overturning the Executive's policies on the Floor of the House. There would be no conflict between me and my hon. Friend the Chairman of the Committee and his colleagues on this score, because I know

that they do not want, deliberately and intentionally, to remove this power from the Floor of the House. Of course not. But I am being fair to them, and they must not erect an Aunt Sally and charge me and my hon. Friends who agree with me with the assumption that they do intend to do that.
We do not charge them with that. Let us cut that right out of the debate. What I charge them with is, perhaps, more sophisticated. I am saying that, without any intention on their part, if this procedure were adopted, we should inevitably move in that direction.

Mr. Chapman: The things which my hon. Friend is worrying about, that these Committees would do, could now be done by the Estimates Committee—every one of these inquiries, about whether we have a third London Airport and so on. But we still have an Estimates Committee and a live Floor of the House, because we have a parliamentary tradition which works that way. I think that my hon. Friend is making his own Aunt Sally and knocking it down.

Mr. Mendelson: I submit that we have not an Estimates Committee at the moment which could do this—

Mr. Chapman: Yes, it could.

Mr. Mendelson: Well, we disagree on this, obviously. I say that it cannot do these things, because these are major policy decisions and policy as such is not within the realm of the sub-committees of the Estimates Committee. Of course, the frontier is blurred and we are not talking about a one-sided view. What these proposals mean is moving in the wrong direction.
My hon. Friend the Chairman of the Committee and other hon. Members who have been prominent in this debate have asked us, "Are you then saying that we must not do anything to get more control again for the House of Commons over the financial and administrative policy of the Executive?" Of course nobody says that, and hon. Members know that it is not my view or that of my hon. Friends who agree with me.
I am saying that hon. Members are chasing an illusion if they believe that they can strictly confine themselves to matters of expenditure and administration without at the same time dealing


with major policy issues and without in any way raising the matter of the control of the House of Commons over these affairs. I am anxious that control by the House of Commons over policy making and policy decisions by the Executive should be advanced. I am dissatisfied with the present situation, perhaps even more dissatisfied than was my hon. Friend the Member for Berwick and East Lothian, who gave the example of the decision to reintroduce prescription charges and to increase the charges for spectacles. I do not know how my hon. Friend voted on that occasion, but I voted against that proposal and I am at least as concerned about the matter as he is.
But, as my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) pointed out in an interjection, the setting up of these functional sub-committees will not change that situation one little bit. How did that decision come about? My right hon. Friend the Secretary of State for Social Services has one great merit—he is quite communicative and he likes his colleagues to know a little of what goes on in his mind. He is not as silent as are some other members of the Cabinet, and that is a great democratic merit in my right hon. Friend. On various occasions he has let it be known that this was a secret Cabinet decision which had been taken long before he announced it in the House of Commons. He said that the decision was knocking about the Cabinet for months but that no decision was taken at first about announcing it in the House of Commons. It was top secret, and it was not the sort of decision which my hon. Friend the Member for Birmingham, Northfield (Mr. Chapman) would have prised out of the Secretary of the Cabinet months before it was announced in the House of Commons.
I will tell my hon. Friend why. If at any time before my right hon. Friend made that announcement at the Box it had been revealed to the members of the Parliamentary Labour Party that this was the intention, there would have been such an outcry and revulsion that it could never have been done. The price of doing it was secrecy. That often happens, and it is one of the reasons why there was a secret decision. The Government needed to be able to tell hon. Members, "We have already announced it. The Secretary of State has announced it and

therefore nothing can be done about it". If my hon. Friend thinks that they will give up this great power of secrecy which they have because functional sub-committees will wish to pry into their secrets, I can assure him that the whole idea is absurd. That suggestion will make no difference at all.
The only way in which the House could have prevented the Cabinet from introducing those increases was if those of us on this side of the House, as we did last night about animal welfare, who were determined to oppose these increases had found a response on the other side of the House. Alas, we did not. Many of the excellent hon. Members who were here last night to protect the welfare of animals, together with some of us, were not there on the previous occasion to protect the low-income earners who cannot afford these increased charges. Had there been a majority threatening my right hon. Friend on that occasion, I am sure that neither my right hon. Friend nor the Prime Minister would have considered for one moment risking the life of the Government before the Prime Minister decided to go to the country in a General Election. My right hon. Friends would have surrended the increases, which would never have been imposed.

Mr. Sheldon: My hon. Friend should not be allowed to get away with that red herring. The second increase in charges was a political decision. Much more relevant was the decision taken in January, 1968, about the education charges, when the limitations of choice were so constrained that the Government tried to save £30 million—and then, in the same year, introduced Supplementary Estimates amounting to £500 million. That was the limitation of choice. The other decision was political.

Mr. Mendelson: Without going into too much detail, I would argue that they were both political decisions. I will attempt to prove to my hon. Friend that many of the earlier decisions on public expenditure in general were equally political decisions, often under the pressure of the Opposition, because on political grounds the Government wanted to appear to the country to be tough towards those who did not have the ability to buy these things for themselves—as tough as the Opposition had


said they would be in similar circumstances. That has always been my view about the political strategy and that is one of the reasons I have always opposed it. I remind hon. Members of the early decisions in 1968 and of the fact that it sometimes takes two years to two-and-a-half years before these decisions are applied. But they are decisions of general political strategy and functional subcommittees would be able to do nothing about them. Only the House of Commons could do something about them.
I warn the House that we must not fall into the error of thinking that these are in any way technical matters. I should like to see control of expenditure and control of administration left in the hands of the Estimates Committee. Let them improve their efficiency. I agree most strongly that the staff ought to be improved. Many of them are very good, but there ought to be more members of the staff. I agree with everything which my hon. Friend the Member for Berwick and East Lothian (Mr. Mackintosh) said about the research facilities which ought to be available to every hon. Member, because that must be right, whichever way the job is done.
But let us not embark on any kind of procedural change, as would be done by the introduction of these functional subcommittees, particularly in defence and foreign affairs, which would give the impression that there is a group of nine experts controlled by a larger Committee and that those nine experts receive a great deal of information from the Executive which other hon. Members may not receive, that they become specialists and that they therefore have superior wisdom in these matters when they report to the House. In that way we should be creating an illusion in the minds of the electorate that real control of foreign affairs or defence was possible in this way.
Let there be more efficiency but let everybody realise that the only effective control of the Executive lies in an increase in the number of independent-minded hon. Members who are devoted to the principles and philosophy of their party and who are not prepared to hand over judgment on every issue which the Executive propose to the House of Commons. There is no other way. It

is the traditional way. It is the only way that can be effective in the future.

7.8 p.m.

Sir Spencer Summers: This is one of those tiresome days when one has to be in three different places at the same time. I therefore start by apologising to the right hon. Gentleman the Leader of the House for having missed his opening speech. I have heard all that it has been humanly possible to hear in the debate, but inevitably I have had to miss quite a lot.
I dissent fundamentally from the criticisms made of the Report by the hon. Member for Penistone (Mr. John Mendelson). While I go along with the hon. Member in saying that final power over the Executive must rest in the House of Commons, I should much prefer the exercise of that power to be based on well-informed knowledge gathered by others who have the time to gather it before that power is exercised, rather than see the use of the power threatened without a great deal of the information which such Committees as are here proposed will produce.
I support the Report, therefore, taking the view that the main thinking behind it is sound and, indeed, overdue. The creation of Specialist Committees alongside the excellent functioning of the Public Accounts Committee, which will continue, and alongside the somewhat changed features of the Estimates Committee, arose from a variety of motives and a variety of objectives which differ in different parts of the House. It is high time that there was some clarification of the situation, and I therefore very much welcome the general plan produced by the Report.
We must begin by examining a crucial feature of the Report which is the terms of reference to be given to the various Committees recommended and which it is claimed will help them to discharge their duties. Hon. Members who are familiar with the Report will appreciate the significance of the terms of reference in paragraph 35. I am somewhat puzzled because, according to sub-paragraph (a), each sub-committee will have to study expenditure projections, compare them with those of previous years, and report on any major variations and
on the progress made by the Departments towards clarifying their general objectives and priorities.


It is not clear what that means. Nor has any hon. Member attempted to make it clear. I therefore begin with some doubt as to whether it would not be desirable to rewrite the terms of reference.
Sub-paragraph (c) may be regarded as containing tasks traditionally carried out by Committees of this kind, for it says that the sub-committee
…should enquire, on the lines of the present Estimates Sub-Committees, into Departmental administration, including effectiveness of management.
I would like to see sub-paragraph (c) made the first task assigned to the subcommittees, with sub-paragraph (a) as the second, but I must enter a word of warning when considering projections and comparisons.
I have been the chairman of a subcommittee of the Estimates Committee for a number of years. A special assignment was allotted to us. We were to examine the Supplementary Estimates in the early part of the year and then we were to study the trends revealed by the Financial Secretary's report and compare them with previous years along with highlighting variations, and so on, not a very different task from that outlined in the terms of reference for the newly-proposed Committees.
When we began our assignment we had considerable enthusiasm for the task in hand. We started at a time when there was in the House a strong demand for effective control of the Executive on matters of expenditure. Every member of my Committee felt that he was performing a sensible task. However, we decided to give it up, partly because everything turned out in practice to be too vague. A trifling change in a percentage involved a great deal of money, but as it was only a trifling percentage it was difficult for us to get to grips with it; and probably the trends and projections which we examined sprang from policy decisions over which, as members of the Committee, we had no control and from such matters as the impact of inflation.
Because such matters were out of bounds for us in their origin, and because the growth factor arose as the result of inflation over which we had little if any control, we came to the conclusion that we could spend our time more usefully.

For this reason I enter a word of warning about sub-paragraph (a) in paragraph 35 of the Report. While I do not suggest that it should be scrapped we should bear in mind what has happened in the past.
Sub-paragraph (b) tells us that the task of each sub-committee will be to
…examine in as much detail as possible the implications in terms of public expenditure of the policy objectives chosen by Ministers and assess the success of the Departments in attaining them.
It is in this part of the terms of reference that many people fear that authority will be transferred from the Floor of the House to these bodies; and it is in this sphere that those who express these views -have the strongest case. I am not saying that their case is extremely strong; simply that it is a matter which must be carefully considered.
I do not believe that hon. Members fully appreciate the time it takes to do justice to the projects mentioned in subparagraphs (a), (b) and (c). Indeed, I do not believe that there will be time for these Committees properly to carry out the three tasks to be assigned to them in sub-paragraphs (a), (b) and (c)—that is, unless they meet more frequently than it has been possible to persuade people to gather together hitherto.
Moreover, if there are to be selected specialist Committees as well, looking into this, that and the other aspects of public policy—something which the hon. Member for Orpington (Mr. Lubbock) might welcome—and if each is to be comprised of nine members, I question whether the tasks assigned to them are capable of being properly fulfilled; that is, without something or somebody suffering in the process. Nor do I consider the provision of adequate amenities—secretaries, and so on—will make all that much difference. It is the time that an hon. Member can make available to read the necessary documents and take part in discussions that is all-important. All the amenities in the world can not make all that much difference on that score. I fear that in view of the multiplicity of obligations which hon. Members have—they are greater today than they were years ago—it is a mistake to have nine members on each Committee.
We are told that a complement of five was considered, but that nine was decided


as the best number. I suggest that neither five nor nine is right and that in discussing the matter the Select Committee missed the bus by not suggesting seven. I do not want more Committees, but I urge that we try to avoid back benchers being saddled with intolerable tasks as a result of the establishment of yet more and more Committees.
It is important that matters like defence and external affairs are not usurped from the point of view of the broad issues that are debated on the Floor of the House. It is in this connection that we should remember the application of our procedural rules. A rule can be worked one way so as utterly to wreck the life of Parliament. Worked another way, the same rule can make life here tolerable. If an Opposition wished to use all the opportunities which are technically available to them, they could practically bring the life of Parliament to a standstill. That is not done, because the Opposition of the day know that the reverse would happen to them when they found themselves in power. In any event, activities of that kind would not be tolerated for long by those outside the House. We can, therefore, rely on good sense to be displayed in the application of our rules and procedures.
I imagine that the Select Committee appreciated that the Estimates Committee has a general Committee comprised of all its members. I am, therefore, rather worried about the composition of the general sub-committee which it is proposed to establish to do its work. The Select Committee no doubt thought of having all nine members of each subcommittee on the general Committee, giving a total of 72 members. That would have been an intolerable size of Committee with the result that it was finally decided to have eight members from the sub-committees, one from each, plus some outsiders.
I do not believe that the system proposed will work in practice. One member of each sub-committee will have an intolerable burden of responsibility placed on him if he is to be the only representative of that sub-committee on the general sub-committee. We try to eliminate partisan aspects in these matters, but we are not always successful. It would have been safer and sounder in this case to

have avoided a membership of 72, by having two representatives from each subcommittee, rather than one, on the general Committee. That would have enhanced the smooth running of the general Committee, because there could have been one representative from each side of each sub-committee with the result that the rulings and amendments which the general Committee is expected to make would have been more amicably accepted by all concerned.
It is said that these Committees are to perform vital work and that the system proposed would break down without importing some wise men from outside. The hon. Member for Birmingham, Northfield (Mr. Donald Chapman) attempted to explain why, but I am not sure that the task is as formidable as he made out.
The general Committee will have to look at projections and at the general running of the sub-committees, present the necessary reports to the House and deal with Supplementary Estimates. To give the top-level Committee in this case responsibility for the Supplementary Estimates is, I believe, unsatisfactory. The study of Supplementary Estimates for which my Committee has been responsible for a number of years requires delving in considerable detail into the various aspects of the Estimates if the task is to be carried out with conviction and satisfactory reports made.
I am not sure that this counterpart of the present arrangement will prove a satisfactory body, although its numbers may be fewer. We would be wiser to suggest that when a Supplementary Estimate is produced, the routine work of the Committee concerned should be interrupted for 10 days—no longer because there will not be time; Parliament must pass the Estimate quickly—while the matter is examined and a report made. Indeed, a report may not be necessary. In many instances, it is possible to allow Supplementary Estimates to go through without a report. It is, therefore, safer to send Supplementary Estimates to the Committee which is familiar with the topic. In nine cases out of l0, nothing needs to be said about the Supplementary Estimate, although occasions arise when much needs to be said.
I have in mind a Supplementary Estimate which we received from the Ministry of Agriculture, Fisheries and Food


for £70 million resulting from the method of guaranteed prices getting out of hand. It is better for Estimates of this kind to go to a Committee which is familiar with the subject than for it to go to a Committee whose members, or certainly half of them, know nothing about it. This is why a fresh look should be taken at the work and composition of the general Committee.
There is a growing danger that too much will be placed on the proposed plan and too much will be expected to be done too soon. I feel that it is partly because too much is expected too soon that the fears that have been expressed are exaggerated. This will be a slow process and the added impact of policy on top of what the Estimates technique has hitherto been will slow it up. We will have to discover how far the party composition of the Committee can be preserved with a greater emphasis on policy, along with the ability to invite Ministers to be cross-examined, if they are willing. This will put an increasing strain on the all-party approach which we attempt to have towards these topics.
We must, therefore, be careful not to go too fast. If we accelerate too greatly a precious ingredient in the whole business of all-party affairs will be lost. My only other comment on the criticisms of the hon. Member for Penistone is that I am not in favour of back-seat driving.

7.24 p.m.

Mr. Robert Sheldon: I support the remarks of the hon. Member for Aylesbury (Sir S. Summers) to the extent that I should take a somewhat longer-term view than has been taken by some of my more optimistic hon. Friends. However, I strongly favour the Report, although I accept that a number of its plans will take a considerable time to develop.
I regret that the hon. Member for Orpington (Mr. Lubbock) is not in his place because I intend to comment on one of his solutions to the problem of the number of Select Committees and the number of hon. Members who are required to serve on them. One of his solutions was to forgo the scrutiny of the Public Accounts Committee. I am sorry that that nonsense was not taken up immediately, because the hon. Member's solution was to give the scrutiny to the bodies which

had an interest in the spending of money. I cannot think of a solution that is more opposed to our tradition of watching public expenditure carefully.
We all know that the reason why this question is coming before the House has been the realisation that when we talk about the power of the Executive, so much of that power lies in the control that it has of expenditure and the lack of detailed control, which even the Government do not have and which we are gravely doubtful whether they exercise. Thus, we have seen over the years a slipping away of this control out of the hands of the House of Commons and even, to a large extent, out of the hands of the Government. It is the great need to re-exercise this control of matters that is becoming increasingly important as the Government involve themselves more and more in the daily fabric of the industrial and commercial life of the nation.
If the House cannot do it, it will not be done at all. The argument should not be whether it is entirely satisfactory. The argument which we should be considering is that if we cannot do it here by means of the suggestions made by the Committee on Procedure, it will not be done at all. Therefore, if we decide that we as a House of Commons will not let slip from us the key controls of power, we must come to a decision about how we will exercise that kind of control.
There are those who, for one reason or another, do not find it entirely satisfactory. Many of us must have reservations on certain aspects. Nevertheless, it is essential that we provide closely argued alternatives if we are not to see the House of Commons wither because power is effectively removed from it. That is really what it is all about.
There was a time when one could make a long speech and, as a result, analyse the way in which the Government were carrying out their detailed policy and pinpoint every one of the major areas in which the Government were going wrong. Those days have long since passed, because no hon. Member any longer has that kind of knowledge. The real task, therefore, which a Member of Parliament has to perform is to get that knowledge.
The obtaining of that knowledge demands question and answer sessions. Question Time does not produce the


opportunity. The one supplementary question which we are allowed to put is a pitiful way of discovering what the Government are doing, because every junior Minister on his second day at the Dispatch Box learns how to parry. What is needed is the question being put again and again until the answer is forced out. This is a technique which members of the Public Accounts Committee and of Select Committees of all kinds have learned, but it is not a technique which can be fitted into the working of the House.
What is essential is that if we are to get the information that is needed, if we are to control expenditure, we need to put our questions as often as is required to elicit the answers. Then, we can obtain that control and, perhaps—almost as important—make sure that Ministers also know that all too many of them do not at present know. This is one of the first things that has to be done if we are to fulfil our historic rôle as a body which controls expenditure.
The second point which I would like to make concerns the choices that the Government have to make from time to time. The hon. Member for Penistone (Mr. John Mendelson) seems to have doubts about how this would increase the area of choice. At any particular time, a number of choices are available to the Government. We know that this comes very largely in the third, fourth and fifth years of a Government's life. Nevertheless, even in years one and two there are choices, because the Government are forced to take certain decisions of varying kinds as the economic situation either improves better than was expected or, perhaps, does not do as well as was expected. They thus have a choice as to whether a programme should be introduced a little earlier or delayed.
Our recent history has been of cuts rather than increases, but it is interesting to see the way in which those cuts were made. I would select as the classic example the situation in January, 1968, following devaluation, when it was decided that to save certain sums of money the raising of the school-leaving age would be postponed and the Health Service charges would be increased.

Those were two major decisions. The particular one which annoyed me even more than the Health Service charges was that on education, because for various reasons I felt that the projects in question were a cheap method of introducing something which I considered to be very important. The cost involved was £30 million.
We had enormous arguments in the party here and in the country as a whole for the sake of saving £30 million. We know that within a few months we were passing Supplementary Estimates for hundreds of millions of pounds. That was an indication of the way the whole thing had become out of control. We were straining at the crucial £30 million out of tens of thousands of millions of pounds and finally having to accept Supplementary Estimates.
This is happening all the time. As we go on, the choices between various kinds of expenditure are narrowing year by year. The task of this House and of the Select Committee which, I hope, will eventually emerge must be to widen that choice, to show us that there are other alternatives and that it is not simply a question of going round the Cabinet and saying "How much will you lop off?" The whole thing needs to be reopened so that we can at any one time say that it is not a question of lopping off, that more should be spent here and less there. There should be a way whereby all these things can be compared with each other.
I agree, of course, with the hon. Member for Aylesbury that this is not something that we can seek straightaway, but it is something towards which we should be working. Although we cannot have the whole range of choice open to us at any one time, we can widen the area of choice, which at present is narrowing dangerously. That must be one of our main tasks in this respect.
The Report mentions the circle of control of public expenditure. It starts with the need to discuss the policy—and this includes the area of choice—so that we can decide for ourselves what things we want more of and what we can do with less of; secondly, examine the means of implementing this policy; and finally, scrutinise the way in which it is carried out. As a member of the Fulton Committee I certainly endorse this by


means of objective and accountable management, by making sure that there is one group of people, one person even, who is accountable for carrying a project through. This, again, is related to output budgeting so that we can ascertain how much a project costs and decide again what we can do and where we can make our decisions.
I am reminded of an aspect of this because I was very much concerned four years ago with the cost of our east of Suez rôle. One had great difficulty in trying to ascertain how much it was costing us. When I came into the House five years ago, one of the earliest Questions I put down was to try to discover the cost of our east of Suez rôle. I put down an innocent Question. It was only after months of patient endeavour that I realised the difficulty of finding out how much it cost, because the Defence Department did not work that way. It worked on the theory that if there was a British interest it had to be supported by men and arms; the cost was something that came in later when the cheques were signed for the various bills.
One of the tasks which the Ministry of Defence did successfully was to introduce attributions in showing the cost of our east of Suez presence. By means of question and answer, one was able to tot up the various bills as they came in and ascertained the enormous cost that our foreign policy was placing upon us as a burden. The old method of staff, buildings and equipment being costed out instead of discussing the kind of policy which the Government were carrying out and its cost was a major burden to us in understanding the kind of post-imperial rôle that Britain had to play.
I would like, finally, to deal with the question of getting Members to serve on these Committees and getting the staff and the rooms. I accept the point that if there is a real job to be done, there should be no difficulty in meeting those requirements. The size of Committees is still far too large. I see no reason why the number of Members on Committees should not be reduced to the number of those who will, in fact, attend —because, fotrunately, there is a factor in favour of small committees. The smaller the Committee, the more useful it is for Members serving on it, the greater the influence they have and the greater

the interest they feel. Therefore, if we were to reduce the numbers from 10 to five, or even less, we would not have much difficulty in finding Members willing and anxious to serve on a Committee to which they could devote their time effectively.
As a member of a Select Committee, I know that one has frequently to wait for half an hour for one's turn to put a question. This causes frustration. There is no shortage of Members of the House of Commons. We have 630 of them to serve on these Committees. There is, therefore, no problem of numbers. Our need is to make use of them properly. It is no use trying to use them properly when we have Standing Committees with 15 loquacious Members talking to 20 silent Members. This is an utter waste of our manpower. We need to reduce the size of these Committees and increase their effectiveness.
I am happy to give a great deal of support to the excellent work of the Select Committee on Procedure. In terms of the blueprint for the kinds of subcommittees that it suggests I think that this is going too far at present. However, the broad outline which the Select Committee has disclosed, is, I think, absolutely right and should be supported.

7.38 p.m.

Mr. Peter Emery: Surely the biggest problem, as every hon. Member who has spoken has underlined, is that the House of Commons has to combat the overwhelming power of government, irrespective of party. The Government Front Bench has all the cards stacked on its side. For the ordinary Member to be able to influence, or frequently to obtain information from, the Government becomes more and more difficult. Indeed, the power of the Executive is immense and is increasing. It has got to be diminished. It must be diminished if Parliament and Members of Parliament are to be able to sustain the position which Parliament has always had historically. I therefore welcome the Report and congratulate most fully the hon. Member for Birmingham, Northfield (Mr. Chapman), who was the Committee's Chairman.
The Report is probably the most concise presentation of Governmental financial procedures we have had to date, certainly in one volume. It is therefore


of immense use, academically or politically, to anyone who wants to get to know how the financial workings of Government are activated. It is also one of the most concise and excellent presentations of the existing planning, programming and budgetary systems. I only hope that some people outside the House —in industry, management, the trade unions, and the like—will look at some of the papers that were presented to the Committee, because these are immensely useful documents which should have much greater publicity than they will get as appendices.
I was somewhat surprised to find the Chairman of the Committee so intent on arguing that the recommendations were not entirely new; that they were not novel procedure. He seemed intent logically to suggest that the revamping of the Estimates Committee was the Conservative evolution of the present structure. My only criticism is that the Report was, perhaps, not radical enough, and did not go far enough in examining more ways in which back benchers could attempt to get information from the Government and examine specifically the activities of Ministers and Government as a whole in the furthering of their policy decisions.
The House must realise that it will be difficult for any structure of back benchers to impress on the Government the evolution that the Committee's recommendations suggest, because it is a vested interest of Government to be able to protect themselves and their powers in relation both to information and policy. I only hope that the Report will have done something in this respect—the speech of the Leader of the House obviously indicated a willingness to accept change in this direction, although we had no specific undertaking when the Committee's structure recommendation would be accepted. I only ask the Treasury Bench to discover how soon in the next Session of Parliament we will be able to have some judgment and decision by Government. Unless we get that fairly early in the next Session, the recommendation will be lost in the working of the House for at least another year. I urge that something be done, even if only in a small way, as soon as possible.

The problem facing the Chairman of the Committee was indicated when the Chief Secretary asked him how far he saw this matter altering from functional investigation to policy investigation. These are the two phases of the Report and I want to refer to each of them.
It is essential that we should be able to obtain a Committee structure which will enable us to scrutinise in depth, in a rolling forecast, not only past and present expenditure but, particularly, future expenditure and the way in which it is being planned because of Government policy.
There is also the need for these Committees to be able to carry out more ably cost effectiveness studies of policy which is the responsibility of more than one Department. A prime example is the problem of expenditure in the development areas. We have had a number of policies. We have had sums of money granted from the Board of Trade for development. We have had taxation, with a special rebate on S.E.T. in these areas. We have had expenditure on the infrastructure, particularly roads, to make up a policy of assistance.
At no time has there been any cost effectiveness study to discover which type of expenditure gave the best return to those areas: was it purely infrastructure expenditure or purely grants for industry? Never has the historical capital or the growth capital that might exist in housing and schools been taken into consideration, but cost effectiveness analysis is necessary in order to know how these very large sums of money should be spent in order to get the highest return. It is essential that the House and the Government should have this information, and if these Committees could help in that way it would be a major step forward.
The hon. Member for Edmonton (Mr. Albu) told us not to imagine that government is the same as business, and I agree with him. No one in business has suggested that modern management techniques can make decisions. The errors crop up when people believe that that can be done. The decision must still be made by management or by individuals.


The techniques are useful aids in trying to make the right decision and in getting the proper basis of information so that one is not flying the aeroplane entirely in the dark by the seat of one's pants in the most old-fashioned way possible.
That is why it is essential that Parliament should be able to conduct much more detailed inquiry into Government expenditure than is at present possible. For instance, I have for some time been trying to find out how much public money the Government are spending on research projects in management and management techniques. I have been to the Treasury and to the Department of Education and Science. Finally, I have the answer that the Government do not know, and that it would cost £72 to find out. I have a good mind to offer the Chief Secretary a cheque for £72 now in order to get the information. Something must be very wrong when a Member of Parliament cannot find out how much the public is spending on research into management techniques. This is the sort of thing that makes this place an anomaly, and lowers its prestige in the eyes of many people outside.

Mr. Chapman: If this system is set up, a sub-committee would be able to prove the question of assistance to industry, because that is one of the proposed headings.

Mr. Emery: I thank the hon. Gentleman.
I turn from the problem of scrutiny of expenditure to that of scrutiny of policy. Here difficulty arose in an interchange between the hon. Member for Northfield and the Chief Secretary. What worried the Chief Secretary was the question of when Committees could begin inquiring into policy, why policy decisions had been made, how they had been made, and on what facts they had been made.
I understand this worry. It is an historic worry. It is a worry that Governments have always had. However, it is old fashioned and it must be overcome. The House has a right to know why and how policy decisions are made. Only when the House is able to do this will there be a chance that policy decisions which go wrong can be corrected.

There is a great deal of difference between being able to inquire into the policy structure in the domestic Departments and being able to do so in foreign Departments. On the last two recommendations in paragraph 33—defence and external affairs—questions of security and the whole matter of our relations with foreign Governments involve secrecy and may obviously have to be protected from the deepest inquiry which I submit should be open and above board in regard to domestic Departments.
Many Members know from their experience—if not in government, at any rate from fagging as P.P.S.s—that, to a certain extent, decisions on expenditure do not depend on the amount of information which may be placed at the disposal of the Cabinet when making a decision. They depend on how strong the Minister concerned is in arguing his case in Cabinet. A strong Minister will get more of his way than some less able or less extrovert Ministers. Therefore, there should be close examination by a House of Commons Committee into the background and basis upon which policy decisions have been made and this will help Governments to make better decisions and evolve better policies.
There is the problem of the political decision and the social decision. Nobody should be afraid to account why a social decision has been made. Why should a Government be afraid to tell this? Why should they be afraid of accounting why a political decision was made? Perhaps this is new thinking, but it is a question which back benchers have a right to ask. If the Government do not wish to concede this, they must advance a stronger case than I have seen reasoned in the evidence given to the Select Committee or propounded from the Government Front Bench.
My hon. Friend the Member for Guildford pointed to the alteration which the investigation would bring in allowing the Civil Service to be cress-examined on matters of policy, as opposed to the Minister. In giving evidence to the Select Committee on Nationalised Industries, the chairmen of nationalised industries have argued policy points against Ministers; but this has in no way detracted from the position of the Minister I admit that this is not an exact parallel, but it shows how people operating under the same


Ministry can be cross-examined and come up with varying answers and reasons. This does not detract from the Minister, nor from the Civil Service, nor from the nationalised industries. The argument that if this were to happen it would undermine the structure of the Civil Service is not valid. In any case, the structure of the Civil Service is changing.
I do not agree with the hon. Member for Edmonton that these Committees should sit in private. The power of these committees will be shown by the ability of the Press and of the lines of communication to show what they are doing. Obviously, they will have to go into camera on occasion, but they must be able to make public as soon as possible what they are doing and how they are doing it.
If they are to work efficiently, the staffing of these committees must be strengthened. In this I go further than the Chairman of the Committee. Unlike the hon. Member for Edmonton, I do not believe that the staff have to be servants of the House. Although it is desirable that the Committee's Clerk should be a servant of the House, I do not believe that the Clerk has to do all the research work, all the preparation, and all the work that the Clerks have to do for these Committees at the moment. In many instances they are not prepared for it. They are being dropped in at the deep end on a new subject. They have to read it up and gather whatever information they can to assist the committee.
The Committee should be able to have its own budget and go out and get experts in the subject it is dealing with and hire them as consultants, if necessary, for a short time before turning to other subjects. The Treasury will argue that this will cost money, but this is the work of Parliament. If we cannot have a little of the £7,000 million which is being spent in the public sector properly to staff a thorough investigation into the working of the Executive, we are in a very parlous state and the Executive is showing scant regard for the working of Parliament generally.
I hope that this scheme can be implemented quickly and effectively. It need not be done in one fell swoop. I do

not think that it will necessarily produce massive results immediately. I believe that Members of Parliament would be willing to serve on these Committees, even with all their other duties, particularly if the Committees had proper powers and were properly staffed. Some Members would dedicate much of their Parliamentary life to working specifically on these Committees.
How can it be suggested that the only way in which we can influence Governments is by threatening to overthrow them? How many times does that happen in a year? That is the most pseudo, and one of the most conservative reactionary arguments, that I have heard, and I would not have expected to hear it from the hon. Member for Penistone (Mr. John Mendelson). The thought of tears rolling down his face and the suggestion that we could influence policy by threatening the overthrow of the Government was more than I could stomach.
This is a new method of examining and challenging the power of the Executive and provides a major new working structure for the House. No one has admitted in this debate that the regard in which Members of Parliament are held in the country has greatly decreased in the last 30 years. The reason for that is that most people do not believe that we can influence anything other than in the most minimal way. If we give hon. Members a job to do in examining and questioning the Executive, there will be a resuscitation in the reputation of Parliament and in the desire of people of ability to become Members.

8.1 p.m.

Mr. Brian Parkyn: I am glad to have the opportunity of taking part in the debate, which is as fundamental a debate as we could have. We are dealing with the stuff of democracy itself. I sincerely agree with the hon. Member for Honiton (Mr. Emery) about holding as many meetings and hearings in public as possible. There are times when they must be held in camera—for example, when matters of security and matters sensitive to industry are discussed—but as much public and open discussion and questioning as possible should take place.
I should like to take up the interesting and outstanding speech of the hon. Member for Orpington (Mr. Lubbock), which


perhaps was heard with some surprise. The Committee of Procedure, in considering the control of Government expenditure, failed to get to grips with some of the more fundamental aspects of what accountability is about, particularly when it concerns science and technology.
At its simplest, the democratic process is government by the people; it is community control. Except in all but the simplest units, such as the family unit, there cannot be general participation in decision making. In an increasingly complex society, even participation in decision making by representatives is not possible and government must be delegated to professionals. If democracy, rather than an oligarchy or technocracy, is to be maintained, the Government must be accountable for their actions, through the representatives, to the people. But accountability, is a process whereby the Government, the Executive, make decisions which lead to the kind of society desired by the people.
I am not sure that the Fulton definition of accountability goes far enough. Accountability involve two factors: first, knowing or deciding what kind of society is desired by the people; and, secondly, checking that the actions of the Government are likely to lead to it. We spend too much time considering the second and not sufficient time considering the first. There is no point in trying to check the Government's actions if we are not sure what those actions are supposed to lead to.
The traditional way of controlling the Government is by Parliament controlling the money supplied to the Government and ensuring that it is wisely used. This is excellent as far as it goes, and especially if the end product resulting from the expenditure of the money can be clearly defined. I am, therefore, glad to see the proposal in paragraph 22 of the Report to encourage the use of output budgeting. While I believe sincerely that this is a bad Report, this aspect of it redeems it, because if we turn our thinking more towards output budgeting we are beginning to get on the right lines towards real accountability. From this point onwards, I have little sympathy with the proposals in the Report.
My whole argument rests in the wrong assumption, as I see it, made by the

Committee that financial control and management control are the beginning and end of coping with the democratic problem of accountability. A Government has three principal tasks, all deeply interrelated with each other: the economic, the social and the technical. The same is true in business. Every board of directors should be concerned with these three tasks. Just as we can have a financial audit, so we can have a social audit and a technical audit. If a board of directors concerned itself exclusively with the economic tasks, the company would suffer and finally go bankrupt.
It may well be that we need a better form of financial control over the Executive. I am sure that a great deal can be done to improve the Estimates Committee, if this is the way in which it is to be done. Much more could be done by leaving a great deal of the control work to professionals and by perhaps increasing and strengthening the Comptroller and Auditor General's Department. Members of Parliament are amateurs and should be amateurs, and I am not sure that we are used in the right way if we become too professional in our attitude to the problem of financial control, which is highly sophisticated. Nevertheless, there must be some control which I believe could be better achieved professionally outside the House.
To suggest that the Select Committee on Science and Technology—and here I completely concur with the hon. Member for Orpington—which was the first of the truly specialist Committees, should be submerged in a polyfunctional Committee means that the Committee on Procedure has failed to understand the unique and revolutionary purpose of the Select Committee on Science and Technology.
I was glad to hear my hon. Friend the Member for Berwick and East Lothian (Mr. Mackintosh) say that the recommendations in the Report did not necessarily mean that the specialist Committees should be ended but that they could still continue side by side with this new form of polyfunctional Estimates Committee. However, it is extraordinary, when a great deal is said about the future, or lack of future, of the specialist Committees that my hon. Friend the Member for Bristol, Central (Mr. Palmer), the Chairman of the Select Committee on Science and Technology, did not give


evidence to the Committee on Procedure. It was very remiss of the Committee to arrive at such far-reaching conclusions without having taken evidence from him and, indeed, all the chairmen of Select Committees. I was delighted to hear my right hon. Friend the Leader of the House say that he would discuss with all chairmen of Select Committees their views on this matter.
In the inquiry of the Select Committee on Science and Technology into nuclear power, defence research or carbon fibres, we did not take random subjects, as seemed to be suggested by hon. Members today and, indeed, in the Report of the Committee on Procedure, which we thought might be interesting or would create a little publicity. We looked carefully at certain important areas of technology involving the use of a large number of qualified scientists and engineers and a vast amount of the nation's resources provided by the Government or by industry to see whether those resources were being used in the interests of the nation. That is what we were trying to do, and it is what we have done. If hon. Members look at the reports of the Committee, of which there have been many, they will understand what we are trying to do.
In each case we made certain positive recommendations concerning over-all technical policy. We tried to do a technical audit. This has never before been done in this country, and informed scientific opinion in Government and industry was delighted that at last science and technology would be taken seriously by the House. But, from reading this Report, it seems that science and technology are no better understood now than they were five or 10 years ago.
There is a desperately urgent need to study the hitherto unappreciated aspect of the science and technology impact in its general sociological and psychological effect upon the community. This cannot be and never will be, capable of financial or quantitative analysis.
There is the need to probe into matters which are not yet the subject of Government policy, such as developments in the biological sciences. There is growing awareness of the importance of the quality of life rather than efficiency and overabundance of material things. If Parliamentarians do not think about

these problems, who will? What is the purpose of the form of community control which we call democracy?
The whole emphasis of this Report is on financial control. Of course, there must be financial control, there is no argument about that. I am sure that we can have better control, but this must never be the only control which exists, otherwise we shall no longer be here as representatives of the people, helping to formulate over-all policy, making decisions and getting our priorities right.
It is for this reason that I believe we must continue some of the specialist Committees, particularly those which are not restricted to a Department but to a subject, and particularly the Select Committee on Science and Technology, not because I am a member of it or because the hon. Member for Orpington or my hon. Friend the Member for Bristol, Central are members, but because this is essential. We are living in a technological age, at a time when we cannot look at any decision made by a Government Department without seeing it in relation to science and technology.
Science and technology is not a department; it is like finance. It permeates all Departments and it is what we must see in this House if we are to bring ourselves up to date. I believe that the House and the nation will come to realise that this type of specialist Committee can make a unique contribution in an area just as important as control over quantifiable financial budgets and deviations from those budgets.

8.14 p.m.

Mr. Eric S. Heffer: May I thank the two Front Benchers for remaining in their seats; at least there will be someone to listen to my brief contribution. This debate has been one of the most fascinating that I have heard for a long time. As my hon. Friend the Member for Bedford (Mr. Brian Parkyn) said, we are dealing with the fundamental question of government. We have perhaps strayed a little from the reports from time to time, but the whole essence of the argument has been control over the Executive, and I wonder whether this is being dealt with in the right way.
When I first came to the House I was, rather rashly, put on the Select Committee on Procedure, although I did not


know very much about the procedure of the House of Commons. I came with preconceived ideas. All who enter the House are determined about how the House of Commons should be changed before they even get here. I was much influenced by a book written by Fred Jowitt who, during his years in the House, thought that the way in which to improve control over the Executive was to adopt what was in essence the local government system; that is to say, that the House should be divided into Committees, policy should be decided by those Committees and, from time to time, the whole House should meet together in caucus to agree or disagree the decisions taken in the Committees. This would be the end of Cabinet Government.
I was much influenced by this thinking. In my first rush of enthusiasm, I thought that the extension of specialist Committees might lead eventually to such a system. I was sadly wrong and, looking back, I am not sure that this is the way in which to control the Executive. I do not know whether, in these modern times, the Executive can be controlled, or whether it is desirable to think of controlling the Executive in the way which has been suggested.
We must seek to exercise a measure of control over the Executive, but we must have a strong central Government to carry through the necessary decisions. We must concern ourselves with democracy and there must be a measure of control over the powers of the Executive, but we recognise that the Executive must have real power in its hands.
How do we, as Members of the House of Commons, exercise control over the Executive? The Report of the Select Committee on Procedure has called for the establishment of sub-committees in a new Committee on Expenditure—which is the Estimates Committee in disguise under another name—and it is suggested that in this way control can be exercised over the Executive. It is right that Members of Parliament should have in their hands as much information as possible. It is also right that they should have the opportunity to probe Ministers and civil servants and to examine in committee specialists and experts. In this way hon. Members become better informed in

debate and more competent in their relationship with the Executive.
I am in favour of the establishment of some sub-committees within limits, provided that the power of this House is not diminished. My hon. Friend the Member for Penistone (Mr. John Mendelson) spoke about experience in the United States, and my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) said that Congressional committees of three members possessed immense power. I do not want to see Committees of this House with three, nine or 20 members having immense power since it would have a serious effect on democratic control within the country. I do not go as far as some of my hon. Friends as to their powers. On the other hand, we should not reject altogether the concept of Committees.
I have a suggestion to make about how we should exercise control over the Executive. In fact, it is not my suggestion, but was contained in a book written by one of my right hon. Friends, called "Party Games". Although I did not agree with a great deal of what was said in that book, I agree with the suggestion that there should be fixed elections. If such a system were instituted, the power of back benchers in this House immediately would increase fivehundredfold. Every piece of legislation brought before the House would pass only if it were backed with the conviction of the majority of hon. Members that it was essential, and would not be subject to the will of the party Whips.
It might be suggested that if a piece of legislation were thrown out, it would mean an automatic election. I do not know whether my right hon. Friends would have resigned had they been defeated on the Motion on animal welfare which was before the House yesterday evening. Constitutionally probably a good argument could be put that if the Government had been defeated they should have resigned, which would be ludicrous. Much legislation in the history of the House would not have gone through except under a system of whipping. Perhaps we ought to look at the exercise of control in a different way.

Sir Eric Fletcher: I am interested in the suggestion that there should be fixed elections. Is my hon.


Friend suggesting as a corollary that if a Government were defeated they should not resign but should go on for the full period of the fixed term of Parliament?

Mr. Heffer: That is what I am suggesting. I am sure that one can remember legislation in which the Government could have been defeated because that particular legislation was unpopular but where back benchers did not exercise their real feelings only because of the party machine. I am not saying that there should be no party discipline. What I am saying is that there are other ways of considering the exercise of control over the Executive.
We had a very interesting exchange about whether these Committees would be concerned in detail with expenditure projections and whether they would also be concerned with policy. Paragraph 35 (a), (b) and (c) lay down the threefold task of such a Committee, the second limb of which is:
It should examine in as much detail as possible the implications in terms of public expenditure of the policy objectives chosen by Ministers….
The preceding paragraph sets out the order of reference, which the Committee suggests should be:
To consider the activities of Departments of State….
From that, I would assume that the task of such a Committee would involve policy and that it would not be merely a question of the detailed expenditure which would be subject to scrutiny, and so on.
Are these Committees to be concerned with policy? Some doubt has been expressed. My right hon. Friend wanted to know from my hon. Friend the Member for Birmingham, Northfield (Mr. Chapman) what the Committee was suggesting. Was it going as far as policy, or was it to be the scrutiny of expenditure? I want to know as well, because this is very important. If it means policy, to that extent I object to it strongly. Whether we like it or not, that would be going in the direction of the American system, and I do not want to see that happen.

Mr. Lubbock: It is plain from paragraphs 34 and 35 that the hon. Member for Birmingham, Northfield (Mr. Chapman) suggests that such a Committee should take the Government's existing

policy as its data and start from that point. It would not evaluate any new policies which the Department concerned might possibly adopt in the future. That is the difference between the hon. Gentleman's suggestion and what the specialist Committees do already.

Mr. Heffer: I do not disagree with the hon. Gentleman. The point is that it needs clarification. We should know precisely what we are asked to support when we discuss the matter in the House.
I want for a moment to look at how we affect the way in which political decisions are taken in matters of policy. I do not know whether Committees of this kind will affect policy decisions as such. Certainly they can scrutinise the projections which come forward. They can query the choices which are made and perhaps suggest alternatives. That might be said to be policy, but I do not think that it is.
There are four places in Parliament where policy is made. The essential place is in Cabinet. I am told that sometimes it is not the whole Cabinet but only part of it. However, essentially that is where policy is made. Another place where policy is made is in the various Departments. Obviously each Department with a Minister determines a certain measure of policy. Another important place where policy is made is the party meeting, though, in my opinion, not as often as it should be. Nevertheless, that is where policy can be influenced considerably. The fourth place, of course, is in this Chamber.
I do not believe that the setting up of a series of Committees will change the basic decision making which takes place in our present parliamentary system. It can influence it. It must be understood that it can only influence it. That is all that it can do. I have been disturbed when I have listened to a number of hon. Members. I get the impression that once we establish the subcommittees, they will determine policy. That is not true. It is a figment of the imagination to think that. That is what they would like to happen. That is called participation. Participation in what? I do not know what "participation" means. If it means participation in the sense of discussing something that has already been decided and trying to


influence it slightly in another direction, that is all right. But it must be understood that that is the limit and that we cannot go further in that direction.
I have spoken longer than I intended. I conclude by referring to one matter mentioned by my hon. Friend the Member for Ashfield (Mr. Marquand) who I think made an extremely good speech. There have been some excellent speeches. I was getting worried earlier that if we had more speeches of that kind the House would be stampeded into accepting the Select Committee's recommendations without question. But we did not get that far.
I agree that we are being asked to do two things. First, to agree with the idea of a two-day debate on the proposed White Paper and, secondly, to consider the Service Estimates in a somewhat different way, although basically it does not seem to have changed very much. This is absolutely essential.
My hon. Friend the Member for Ashford said that the test of the Government's sincerity—and I suppose that not everyone is entirely happy—would be whether they accepted completely the second part of the recommendations on the whole idea of the Committee structure. I do not think that that is necessarily so. We can have doubts. We can say that these proposals are going too far without being insincere in that view.
Certainly let us extend the number of specialist Committees where it is essential. Let us go along with part of these proposals, but let us be very careful that we are not opening the door until eventually we have an American-type system where our basic democratic way of exercising control and influence in the Executive is so diminished that we would not recognise our democratic system. I am all for change, but it does not necessarily follow that every change is good, and we should not always think that the shadow is the substance.

8.33 p.m.

The Chief Secretary to the Treasury (Mr. John Diamond): My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) has just made an interesting and penetrating speech. He has indicated, if it were necessary, which it is not, that he and all who preceded

him appreciated how valuable and essential it is on major matters of this kind to have a full and free-ranging debate in the House of Commons because the Chamber somehow produces the kind of background where speeches of this kind can be made.
Having listened to all the speeches, with minor exceptions—and I have had the substance of those conveyed to me—although the House has not been full all the time, nobody could suggest that this was not a most worth-while topic which has been discussed in a serious and helpful way. I am grateful to all who have participated in the debate. In particular, I am grateful to my hon. Friend the Member for Birmingham, Northfield (Mr. Chapman) and his Committee and to the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) for all the work that they have done and for the speeches that they have made.
I should like to start by referring shortly to those matters on which apparently there is complete agreement on all sides of the House. First, the essence of the proposals put forward in the Green Paper which the Committee examined and broadly endorsed. Those proposals were preceded by a foreword, stating:
This Paper deals with certain aspects of the relationship between the Executive and Parliament in the field of public expenditure.
It seemed to me that the essence of those proposals was a sharing—voluntarily suggested by the Government. I add this only because the Committee itself was good enough to pick out a suggestion that I was bold enough to make four or five years ago and which, being that kind of suggestion, naturally took some time to be digested and understood and au courant with public opinion, instead of being either in advance of it or behind it.
I am sure that nobody doubts the sincerity of the Government, or my sincerity, in bringing forward proposals which the Committee has been good enough to endorse, aimed at meeting a serious gap, namely, a sharing by Parliament and, therefore, by our people, in the decision-making process on matters affecting the shape of things to come. I cannot agree more with those who have said that our control processes—the processes by which we have controlled the expenditure of


cash and reinforced the authority of Parliament to reduce Supply without question—have worked well and should continue to work.
They are needed. I need them. I, who spend not the 7 billion to which the hon. Member for Honiton (Mr. Emery) referred but 17 billion of other people's money, would not sleep at night if I did not have all the protections provided by the accounting officers and civil servants, and the complete and utter integrity of the Comptroller and Auditor General, the Public Accounts Committee and the Estimates Committee.
These are huge sums, and they are public money, and their use needs to be most carefully vetted in all respects. Those processes have been satisfactory in the past and I am sure that nothing in the proposals which I made to the Committee, and which the Committee has put into its Report, would detract from the authority of the House or anybody to participate in these control processes.
But it seemed that there was a major gap in the process of bringing public opinion with us, in the sense of public expenditure—not cash votes—which affected our people to the extent, broadly, that one half of what everybody earned was being spent for him. Surely the people had a right, within the limits that that was being done, to say how they would like it spent. It seemed to me that for practical purposes there was very little opportunity for the House to exercise its views or for the people, through their Members of Parliament, to exercise their views, for the simple reason that as a result of our long tradition we had been producing documents showing what was to take place unalterably in the near future.
How much help to anybody is that? None at all. It is a mockery to put before Parliament a document, and to say, "Let me have your views on this document. I cannot alter it, whatever your views are."

Mr. Chapman: Two-and-a-half per cent.

Mr. Diamond: With respect, 2½ per cent. for the immediate year is a gross over-statement, unless we are going to incur a lot of waste. We can stop

expenditure in mid-stream if it is said, for example, with regard to a hospital on which a roof is about to be placed, "Leave it without the roof." We can do that, but I do not suppose that anyone would recommend it as a sensible way of proceeding. So I am sure that we all share the view that this is a sensible and important development in the process of sharing the authority of decision-making. My hon. Friend the Member for Bedford (Mr. Parkyn) said that what we are discussing is the stuff of democracy, and I am grateful to him. That is exactly what I and the Leader of the House intended to deal with and I am grateful that it is regarded in that way.
As to the scope of the proposals upon which we are all agreed, I have made it clear that it is not our intention, or that of the Committee, that there should be any reduction in financial control and the control of the cash payments as such. I only add that to make it clear to anyone who has not participated in the debate, so that, when we come to the Vote on Account procedure, he is not anxious that we are withdrawing any of the powers of the House. The Vote on Account is only a payment on account which covers a period until the money can be authorised, and the payments in respect of which a Vote on Account is authorised have to be covered in full as ordinary Supply Votes. So there is no question of withdrawing the power of the House to authorise Supply or control the payment.
Nor are the proposals directed towards—here I address myself to my hon. Friend the Member for Ashfield (Mr. Marquand)—encouraging a second major debate on the economy on the occasion of each White Paper affecting public expenditure. The House has made its arrangements for a debate on the economy. It may have a special debate, but I am referring only to the annual debate, the four-day debate on the Budget, which is the proper occasion for considering all economic aspects.
It is not our intention that the White Paper, which will be published, if possible, in November—it looks more like December now, but that is a minor point—and which, I gather from my right hon. Friend, will receive a full debate over two days, should be the occasion of an


economic debate. On the contrary, I am inviting the House to concentrate on public expenditure. Of course, public expenditure is meaningless unless set in its appropriate context, which is the Government's responsibility, but that is quite different from the matters concerned in a full debate on the economy.
I therefore say to my hon. Friend who invited me to reconsider this matter that I have refreshed my memory of my evidence to the Committee. I hope that he will not think me unduly immovable if I say that that evidence, on the whole, was what I then thought and still think. If my hon. Friend invites me to reconsider the matter, I will immediately undertake to do so, although I do not hold out much hope that I shall be able to persuade myself that I was previously wrong.

Mr. Marquand: I just wanted to clear up one possible confusion. I certainly did not mean to imply that the debate on the White Paper should turn into a debate on the economy, and that is not implicit in the Report either, I think. I was trying to find out the Government's view about the suggestion in the Report that consideration should be given to giving an economic assessment for years four or five as a background for the debate on public expenditure, which will, of course, not be a debate on the economy as a whole.

Mr. Diamond: I understand that, and that is why I refer to my evidence to the Committee, because this specific question was put to me. More than one question related to it, and I gave my answer then, and, having refreshed my memory, I can say that the words are what I then believed and still believe—namely, that one cannot produce an economic forecast which one does not have and that one should not try to pretend that one can give credible figures by putting them in black and white. People will give credibility to figures to which that credibility ought not to be attached. My hon. Friend has asked me to reconsider the matter, and I will certainly do so. I am glad that we are at one in saying that the intention of the document is not to provide the occasion of an additional deep economic debate.
There is no need for me to go over the details of what is proposed, for they

have met with general approval. But I hope that nobody will be misled by the proposals of a division into the first three years and then the last two years into thinking that the power of the House is thereby to be diminished in any way. I ask the House to realise that this debate will not take place once and for all. It will take place year after year. I invite the House to consider the circumstances of the debate in five years' time when years one, two, three and four have passed. Each time that there is a discussion one will be wise to concentrate on that area in which the discussion can be effective. That is the purpose.
For example, it might be that in respect of years four and five the Government can be—I do not say will be—persuaded. It will be up to hon. Members to make their arguments. Year four in one year's debate becomes year three in the next year's debate and year two in the following year's debate. It would be wrong, therefore, to say that the House has no authority with respect to year two. That might be true when one is considering it as year two, but two years earlier one had the opportunity. One must consider it in that way because it is only by going far enough ahead that effect can be given to the views of hon. Members. I cannot underline that sufficiently. By producing a document covering five years we are giving hon. Members the fullest practicable opportunity to influence the shape of things to come, having regard to the way in which we run our affairs and to the physical facts of the situation.
It is essential that the necessary information should be given so that a meaning ful discussion may take place. May I spend a moment or two on that. It is clear that some hon. Members feel that the House would be well served if in advance of that debate there were examination and analysis of the figures by other bodies so as to assist the House. That is one way of looking at it and I do not know whether that was in the minds of all my hon. Friends in their speeches. It is possible to arrange for the figures to be given with such a wealth of detail in respect of output budgetting and everything else that it is doubtful whether anybody could seriously encompass them on his own and unaided.
My task is not to befog the issue, but to give information about the five years'


figures so to enable an hon. Member, with his intelligence, common sense and normal experience, to use his judgment and contribute to a debate on the general shape of the things to come. That is the position as I see it and it would not be serving the purpose of the House if the information were over-detailed. I am not going further than that.
I recognise that many of my hon. Friends want the information to be given in its most productive form. So do I, and there is no dispute about advancing as fast as we possibly can towards new management and accountability techniques and so on. I could give the House a list of the Departments in which these matters have already been taken a stage or are being taken a stage further towards this end. We are at one on this issue. As management techniques and techniques of control and understanding grow, so it up to the Government to encourage their use and, above all, to set the pace for those outside Government, and to enable hon. Members to understand the figures that are being put before them.
I have said enough to show that I do not believe that there will be any difference between us on these matters. Anybody who knows anything about this sphere knows that we cannot achieve anything overnight. These things take time.

Mr. Emery: I do not wish to ask the right hon. Gentleman to bore the House by listing all the management techniques which are adopted in all the Departments to which he referred. Frequently, there is criticism of the Government for not applying these techniques. Would the right hon. Gentleman find a way of publishing this information, perhaps in the OFFICIAL REPORT, because that would be useful to counter the criticism which one frequently hears about the Government not applying some of the more modern concepts which, as the right hon. Gentleman explained, they are trying to apply and which, I appreciate, are often more profitably applied than they are in some sections of local government and even in industry?

Mr. Diamond: I am grateful for those remarks. I will see if such an opportunity can be taken. My standard is not that we should merely keep up-to-date with others. We have a respon-

sibility, in appropriate spheres, to lead the way. We are trying to give effect to that view, which we hold strongly. Indeed, I am grateful to all those in the various Departments for the work that they have done in this connection and I do not believe that any problem arises over management techniques or techniques of control, accountability or units of accountability. The problem lies in the committee structure of Part III of the Report to give the maximum effect to the proposals in Part II.

Mr. Chapman: As my right hon. Friend seems to be concluding his remarks about the amount of information to be given in the White Paper, may I ask him to say if the Government are proposing to accept paragraph 15, in which we suggest the strengthening of information to be provided for the benefit of the House, in a number of important respects? My right hon. Friend has disagreed with our views in connection with years four and five. There are, however, some interesting suggestions for strengthening the information to be given, while in another paragraph it is suggested that the whole matter should have sufficient narrative that no prior consideration by a committee would be necessary.

Mr. Diamond: It is my intention to try to meet the Committee on this point; in other words, that hon. Members should be able to obtain this one document, to read it and, using their own experience, intelligence and natural ability, to be able to form a judgment and contribute to a debate on the exercise of priorities within the sphere of public expenditure.
Having said that, however, I must point out that we will not get it right the first time. We do not intend to take the view that the first time is to be fixed for all time. We will look forward to helpful guidance from the House on various ways in which the information can be improved and the figures and statistics made more meaningful.
Some specific queries have been put to me, in particular by the right hon. Member for Harrogate (Mr. Ramsden). He asked a number of questions to which, broadly, the answer is in all cases, except one, an unconditional "Yes"—and in the last case the answer is a conditional "Yes". He asked me to confirm that


there will be no curtailment of the debate on the Defence Estimates, having regard to back bench interests, and I can confirm that.
The right hon. Member asked whether it was intended—the answer in this case is, "It is"—that there should first be a main two-day debate, secondly, that there should be three separate days for the separate Services, one for each, which would be taken on Vote A in each case, so that there would be three Votes A, and whether there would be a "fourth" day—in effect, a sixth day, which is commonly known to us as the "fourth" day—and the answer in this case is also "Yes".
The right hon. Member then asked me to confirm that the opportunities of debating particular items without giving notice would, as before, be available to hon. Members. The answer is "Certainly, yes." It is the intention that there should be nine Votes, that the nine should be put down and that it should be open to all hon. Members to contribute to the debate. Thus, on all those questions I can give an unconditionally affirmative answer.
The right hon. Gentleman then questioned me about paragraph 12 of the Second Report, in which the Committee recommends
…that Vote 1… should be divided by Services and presented as three separate Votes….
The answer to that is "Yes". Paragraph 12 goes on to recommend
…that Tables giving information on the Estimates on a single-Service basis should be published in the Defence White Paper…
That will be done this coming year and, as far as it is reasonably possible and practicable, we will do it the following year. I wish to make it clear, however, having regard to the way in which the Services are organised—their co-ordination and integration—that such tables will be less and less significant and less and less meaningful, and I hope that hon. Gentlemen opposite will, in due course, recognise that and not press the matter beyond a reasonable point.
The right hon. Member for Harrogate further asked about the recommendation that
…Appendices giving information should be published with the Defence Estimates
and the answer to that query is "Yes".

I hope that I have answered all the questions put by the right hon. Member.
There have been a large number of interesting and varied speeches concerning the Committees. Although I have been pressed, not unduly, prior to this debate, in a friendly way, to say whether the Government had made up their mind on this issue, having regard to the debate it would have been most irresponsible and inconsiderate if I had attempted to persuade any of my right hon. and hon. Friends to join me in making up their minds on this issue until we had heard this debate and considered its conclusions.
We have had many varied and interesting views, which one could not get in process of question and answer in Committee but could get only by a fully displayed argument by an hon. Member on his feet, when, as we all know, once he is on his feet, we can see what he is getting at no matter what words he uses.
My first conclusion on listening to the various speeches was that whereas I had previously thought that it would take time for the Government to reach a conclusion on these matters, I am driven to the answer that it will now take longer. I say that because the views which have been expressed are all valid, fully argued, logical and different. They cover the whole spectrum.
There is the view that we should have all Specialist Committees. There is the view that we should have no Specialist Committees. There is the view that we should have some Specialist Committees and the Estimates Committee reconstructed. There is a great variety of views and for all reasons. I can understand them all.
My hon. Friend the Member for Penistone (Mr. John Mendelson) made a contribution. There are a great number of points to be taken into account. It would be wrong of any Government, after a verbal debate of this kind, not to give time—not too long, but to take the matter with reasonable dispatch, as we are doing—to enable careful thought to be given to all the different points of view which have been expressed.

Mr. Arthur Palmer: Would not my right hon. Friend also agree that before the Government reach


a conclusion, it would be wise to take into account the experience and views of existing Committees?

Mr. Diamond: Of course. My right hon. Friend the Lord President of the Council—no doubt, my hon. Friend was not able to be present—made it perfectly clear that he is in process of consulting the Chairmen of all the Committees. The views which have been expressed on behalf of the Committee on Science and Technology have been interesting and forceful. Nobody could fail to pay due regard to them. Nor could anyone fail to be impressed by the views which his Committee members have of my hon. Friend the Member for Bristol, Central (Mr. Palmer) and of his distinction. Therefore, there is a great deal to be discussed and it is bound to take some little time before we are able to put to the House proposals which, we hope, will meet with general support.
That is all I have to say, except to thank the Committee once more for the work it has done, to say how grateful I am that it felt able to support the first lot of proposals, to say how grateful I am that, I gather, there is no feeling in the House to oppose the proposals set out on the Order Paper and to say just one thing more.
Reference has been made to Mr. Schulze's book and his proposals. I was privileged fairly recently to attend the I.M.F., where I had an opportunity of discussing public expenditure control and management with a number of my opposite numbers, including the Americans. I hope that I will not be judged immodest when I say to the House that once we have adopted these proposals and got them fully working we will have a system of control and democratic participation in public expenditure which is second to none in the world.

Question put and agreed to.

Resolved,
That Standing Order No. 18 (Business of Supply) be amended as follows:
Line 69, at end insert', and, in respect of any vote on account for civil departments for the coming financial year as shall have been put down on at least one previous day for consideration on an allotted day, he shall then in like manner put the question, that the total amount of such vote outstanding be granted for those services'.
Line 74, leave out 'and all such defence votes' and insert 'for the Ministry of Defence'.
Line 101, leave out from 'put' to 'be' in line 105 and insert 'the question that the total amount of the estimates for the Ministry of Defence'.
Line 122, at end insert 'or, in the case of the estimates for the Ministry of Defence on each vote in those estimates'.

PROCEDURE

Resolved,
That this House takes note of the First and Second Reports from the Select Committee on Procedure in the present Session of Parliament.—[Mr. Peart.]

STANDING ORDER No. 2 (EXEMPTED BUSINESS)

Resolved,
That Standing Order No. 2 (Exempted Business) be amended as follows:
Line 49, leave out 'either'.
Line 58, at end insert 'or

(c) that at this day's sitting any specified business may be entered upon and proceeded with at any hour, though opposed, and that other specified business may subsequently be entered upon at any hour though opposed, and may be proceeded with during a specified period after ten of the clock, or after it has been entered upon, whichever is the later'.—[Mr. Peart.]

STANDING ORDER No. 60A (SECOND READING COMMITTEES)

Resolved,
That Standing Order No. 60A (Second Reading Committees) be amended as follows:
Line 15, leave out 'twenty' and insert 'sixteen'.
Line 15, leave out 'eighty' and insert fifty'.—[Mr. Peart.]

MINISTRY OF TECHNOLOGY

9.3 p.m.

The Minister of Technology and Minister of Power (Mr. Anthony Wedgwood Benn): I beg to move,
That an humble Address be presented to Her Majesty, praying that the Minister of Technology Order 1969 be made in the form of the draft laid before this House on 13th October.
As the House will know this Motion follows the statement by my right hon. Friend the Prime Minister on 13th October, the Order having been laid on the same day. If the House sees fit to approve the Order, it will go to the Privy Council tomorrow and come into force on Thursday.
I take it, Mr. Speaker, that this is not the occasion for discussing the policy or policies of the new Department, but the machinery of Government which is involved in the Order is so important that I hope that the House will feel that debate on it is merited. I must ask for the indulgence of the House in presenting these changes, which cover other Departments as well as my own. Perhaps I might first go through the Order in detail and then deal with some of the wider matters, and my right hon. Friend the Paymaster-General will be able to answer questions that may arise in the debate.
The Order is short. Article 1 is formal. Article 2 merges the Ministry of Power with the Ministry of Technology and, in the latter part, provides for a Minister of State in lieu of the Minister of Power. Article 3 transfers industrial responsibility from the Board of Trade to the Ministry of Technology, and the second part of that Article transfers control of office development in England from the Board of Trade to the Minister of Housing and Local Government, and in Scotland and Wales to the Secretaries of State. Article 4 transfers the responsibility for the I.R.C., exercised previously by the Secretary of State for Economic Affairs, to the Ministry of Technology, and transfers provisions relating to the disclosure of Customs information from the D.E.A. to the Treasury. Article 5 contains the transitional provisions, and the two Schedules deal with the legislative consequences.
That is a very bald outline of a very big change in the machinery of Government, and it covers two areas of Government, one in respect of planning of the environment and the other in respect of industrial development. In making these changes, we are following the principles that lay behind the reorganisation of the Ministry of Defence, which began as three separate Departments and merged under a single Minister. They were followed in respect of the setting up of the Department of Health and Social Security. Thirdly, there was the merger between the Foreign Office and the Commonwealth Office, which, in turn, had absorbed the Colonial Office. There is therefore some experience of the technique: it is not entirely new in government.
I should like to say something about the responsibilities of my right hon. Friend the Secretary of State for Local Government and Regional Planning, because he will have, and I know that there is a lot of interest in the subject in the House and elsewhere, responsibility for regional policy as a whole, covering the economic planning councils and boards. He will also have responsibility for negotiation leading to the implementation of Redcliffe-Maud, and special responsibilities in the area of environmental pollution, which is a matter of growing public concern. The Ministry of Housing and Local Government and the Ministry of Transport will come under his direction and, as the House knows, he will represent both Departments in the Cabinet, and will be examining the possibilities of further integration. But the policy that lies behind that particular change is very well known to the House. Planning, land use planning, and social and environmental development are part of a single complex, and this is the arrangement that has been announced by the Prime Minister.
I turn now to the Ministry of Technology itself which, despite its name—which is, to some extent, deceptive—had, over the years, become very largely an industrial Department. It had acquired responsibility from the Board of Trade for the engineering industries, one by one, and, from the Ministry of Aviation, responsibility for the aviation industry. What is now happening is that this process


is being carried a stage further. The merger with the Ministry of Power brings the public nationalised industries in with the private industries that we previously sponsored, while the remaining manufacturing industries from the Board of Trade are brought in as well. At the same time, from the Board of Trade comes responsibility for I.D.C.s, for factory building, for industrial estate building grants, loans and investment grants, and from the D.E.A. central responsibility for industrial policy, including the I.R.C. and the part which was played by the D.E.A. in regional industrial policy. The objective which I have set myself, and which I hope the House will think is right, is that the new Department should be run as a unified Department and not as a conglomerate of its component parts.
I have brought together a few figures which must be taken to be rounded and approximate, giving some idea of the scope of the new Ministry which the House is being asked to approve. It has a staff of 38,900, of whom a very substantial number work in research establishments. Taking 4,590 qualified staff operating in the Ministry of Technology and adding—because, in terms of overall policy, this is right—the 4,685 in A.E.A. establishments, we arrive at a total of 9,275 qualified scientists and engineers.
Looked at from the management end, at the Under-Secretary level—I am giving figures that must necessarily be slightly approximate—there are about 60 people of Under-Secretary level or their scientific equivalent at the headquarters end and 20 in the research establishments, making a rough total of 80 in all. Adding above that Deputy-Secretaries and equivalents and Permanent Secretaries, the total runs to about 90.
The budget of the combined Departments, which will include the budget of the Ministry of Technology and the giving of investment grants, comes to about £1,500 million a year; and the Department will have acquired from the Ministry of Power responsibility for the supervision and study of the investment programmes of the nationalised industries, running very roughly at £900 million a year.
In addition, there are a number of agencies which will be brought together

—A.E.A., N.R.D.C., I.R.C., Shipbuilding and Metrication Boards, and the industrial estates companies coming from the Board of Trade. Taking the nationalised industries, which employ 960,000 people, and about 82 per cent. to 84 per cent. of private industry, we get an idea of the range of industrial responsibilities which are now brought within the one Department.
In addition—I finish with these two statistics—there are grants to about 60 organisations of one kind or another, including the research associations, and productivity services, one of which—the National Industrial Fuel Efficiency Service—comes from the Ministry of Power; all these number about 20 separate services in all.
I turn now to the more obvious advantages that come from the arrangement which is being laid before the House tonight. One is undoubtedly that for industry that has to work with government there will be some reduction in the number of Departments that the major firms and industries have to deal with. As regards I.D.C.s, for example, hitherto industries that were working with us came to us on one side to make their industrial case and went to the Board of Trade on I.D.C. questions.
We are also bringing together—I think that this is an advantage, too—the experience that government has acquired over the years in handling, on the one hand, its relations with private industry which are of growing importance, and, on the other hand, its experience in dealing with public industries. To draw a parallel, we have gained very substantially by the merger with the Ministry of Aviation in being able to bring into our work with private industry people who have acquired over the years, admittedly in a customer rôle, a great deal of knowledge of the defence industries.
In addition, there are certain connections which previously involved crossing Departmental frontiers which are now to be brought together. One—this is the most obvious, perhaps—is the generation of electrical power and responsibility for the electrical plant industry. Anyone who has been following the difficulties of meeting demand and supply as far as it bears upon the load of a particular industry will see great advantages in that. Gas, oil and chemicals are coming together.
Steel and steel users are coming together. I have had many contacts with the Ministry of Power over the years about steel prices in respect of shipbuilding reorganisation and the motor car industry. These now come together. Textiles and textile machinery come together. Coal and mining machinery come together. Perhaps from a human point of view most important of all, we are able now to marshal in one Department the responsibility for dealing with redundancies and closures that follow from structural change or technological change with functions in the same Department that have some greater capability to deal with regional problems.
I ask the House for its indulgence because I have said enough—and it is only a summary—to indicate that, from the point of view of the officials and Ministers, it is a major management task making, out of the very large block of work done elsewhere, a modern and effective Department. If I think aloud a little, the House will know that it is because we are bound to proceed in an experimental spirit to some extent until we get the matter absolutely right. I thought it correct to be clear in my mind about the objectives of the new Department. Without being too formal, we obviously have acquired, with greater emphasis than before, an interest in industrial growth and expansion, based, as it must be, on economic strength. But this is the contribution which we would hope to make to discussions in Government about economic and industrial policy.
We hope to develop still closer relations with both sides of industry and have this relationship working both ways. If we are doing our job properly, we shall provide a channel through which industrial thinking can be fed to Government when major decisions are contemplated and which, if we are able to win industry's confidence, will be a channel through which public policy can be conveyed and discussed with major industrialists, industries and trade associations.
I know that this is an area which, according to the book and the many people who write it, should be full of controversy. But I can only say, after nearly three and a half years of doing this job in the engineering industry, that there has not been conflict. There have been differences of opinion. There were

some arguments about certain items of policy and legislation passed in the House. I put that on one side. My experience is that working with industry on this basis is not controversial. If we are able to do our job in a professional way and to reach rapid decisions and work informally with the minimum bureacracy, I have no reason to believe that this arrangement will not be of great convenience to industry.
We have, as an objective, built into the Department our responsibilities for defence supply. We still have responsibility—perhaps even more so—of ensuring that our highly qualified body of scientists and engineers have their work oriented and steered even more towards industrial need or to meet social needs of a kind which will emerge as my right hon. Friend the Secretary of State for Local Government and Regional Planning formulates the demands which he will make upon our scientific manpower on questions of pollution.
We must maintain a very close liaison with other Departments. Some questions in the minds of hon. Members bear on the extent to which this liaison can be made real. We must also take a very broad view of our responsibilites because if technology is simply the narrow and short term pursuit of efficiency without regard to human factors it is, quite rightly, likely to meet very strong public resistance. We must therefore find some way, through the Department and in the Department, of taking a broad and long view of the job which we have to do.
Finally—and this is something to which I attach much importance—we must try to pursue our work with as open and information policy as possible. In some areas of defence and commercial security it is not possible to say anything at all, but, apart from those two fenced areas, my view is that we should aim to convey much more fully than may have been customary in the past the methods of working, the organisation of our work and our objectives. I recognise that we shall be judged by results, but I thought it sensible to indicate the way in which I view the job.
I turn to the management task which had to be faced straight away. We are organising the Department in a unified way. We shall have a central economic


group which brings together certain elements from the component departments and which will obviously be charged with the responsibility of considering how Government resources should be deployed over the whole field. We shall have an industry group bringing together the private and public industries. We shall continue to have an aviation group, and we shall have a regional group, which will bring together the regional industrial work which now comes to us, the location of industry and our own regional organisations, and we shall have, as we have had, a research group strengthened by those who come from the outside.

Mr. Tam Dalyell: It is a matter of concern in Scotland as to what extent the regional office of the Board of Trade will be taken over.

Mr. Benn: I will come to this in a moment. As I think the House knows, there is no change in the responsibilities of the Secretary of State for Scotland in this respect, except in so far as he assumes responsibility for the control of office development in Scotland. If there is a point which I have missed on this, I will see that this is dealt with more fully later on.
The first job is to see that the routine work, that is to say the daily business, of the Department is carried through with speed and efficiency. We then have the liaison task. We have the methods we shall need to adopt for handling individual problems that arise, and we have the longer-term policy considerations to which I referred.
I have to be accountable to the House for everything that happens in this Department and, obviously, to concern myself with all major policy issues which arise but, with a group of Ministers of the calibre and nature that I have, it is proper to devolve as far as I possibly can the executive responsibility of these groups. I have placed a note on this in the Vote Office. My right hon. Friend the Paymaster-General will look after the industry group. My noble Friend Lord Delacourt-Smith, who is a Minister of State of Cabinet rank, will look after aviation. My hon. Friend the Member for Chesterfield (Mr. Varley) will look after the regional distribution of industry work which I have described. My hon. Friend the Member for Glasgow, Wood-

side (Mr. Carmichael) will look after aviation in this House and perform certain general work throughout the Department. My hon. Friend the Member for Swansea, West (Mr. Alan Williams) will work with me in the central economic group and on nationalised industries in the industry group, and will have special responsibility for minerals. My hon. Friend the Member for Stretford (Dr. Ernest A. Davies) will look after the research group and will work also with the industry group on private industry matters. The co-ordination of work which is to be devolved in this way will be conducted in the most informal way possible, without a formal committee, by regular meetings.

Mr. Eric Lubbock: The Minister was good enough to make this information available to the House before the debate, but there is no mention of the responsibility for nuclear energy. Will he please clarify that point?

Mr. Benn: The responsibility for the atomic energy division which was previously in the Ministry of Technology is in the process of being marshalled with the industry group, and responsibility for research policy, that is to say the deployment of qualified people, will be dealt with by the research group. That is the best answer I can give.
May I turn to the problems of liaison, which are the ones that lead to the greatest comment at the time of the announcement. My right hon. Friend the Paymaster-General will be responsible for liaison with the relevant Government Departments in the industrial field, which of course includes the Board of Trade, with which we have had very good relations in the past, on exports, in respect of the engineering industry and with the I.R.C. I hope that he will devote some of his attention to relations with the C.B.I. on the industrial side.
May I say a word on exports, as the right hon. Gentleman the Leader of the Opposition referred to exports in his question after the Statement by my right hon. Friend, the Prime Minister? We have now had three and a half years' experience of working with the Board of Trade on industries that we have sponsored and they have not, and this has created no problems. It has been very informal in character, as I aim that all our operations should be, and we shall


be working with the new industry divisions from the Board of Trade and with the power industries in exactly the same way. If any hon. Member wishes to know more about this, I shall be glad to provide further information.
My noble Friend Lord DelacourtSmith will maintain the necessary contact with the Ministry of Defence arising from our supply functions and with the Board of Trade on aviation matters. Again, there is no change there as compared with the past. I am also asking him to undertake the new work which I am anxious to encourage of building closer relations between the Ministry of Technology and the T.U.C. An industrial Ministry which does not have close links with the trade union movement on matters of industrial policy would not be discharging its responsibilities.
Finally, on the matter of liaison, I wish to say something about the work which my hon. Friend the Member for Chesterfield will do in collaboration with the Secretary of State for Local Government and Regional Planning. Here is a frontier where it is difficult to draw a line. If it is drawn in one place, it opens up a liaison requirement in another. If the frontier is moved, all sorts of difficulties will occur unless the matter is handled intelligently. I regard my hon. Friend who will undertake this responsibility as working at least as closely with the Secretary of State for Local Government and Regional Planning as the aviation Minister in the Department has worked with Defence. I believe that it is practicable to do this both in respect of England and the Scottish and Welsh Offices.
I should like to refer to one other aspect, the need to handle problems which continually involve more than one Department in an informal way. Concorde, which concerns quite a number of Departments, has for some time been handled by an entirely informal working group of Ministers who have not had to gather with the formality of papers, but simply to keep the project under regular review. This has worked extremely well and is completely informal in character. Similarly, on closures and redundancies, I myself have worked with the Board of Trade and the Department of Employment and Productivity across the Departmental frontier exactly as if it did not

exist. I feel that there is scope for this sort of co-operation and I intend to encourage it as far as I can.
Finally, when I look ahead at the future policy requirements which a Department like ours will have to meet, it is clear that some issues spreading over the whole Department, such as relations between Government and industry, deployment of Government resources in support of industry, the rôle of trade unions in respect of industrial policy, human factors in technological change, and so on, are issues which a Department like ours, with its new responsibilities, must attack in such a way not only to shape our future policy but even, by the study of them, to give us insights into the handling of current problems.
These are early days to speak with confidence about the way in which the arrangements I have described will work. I am grateful to the House for listening to me at rather greater length than I would have liked. These are very big changes. The House will want to pay tribute, despite the political controversy there may have been, to the Department of Economic Affairs. I can only say that, for my part, I have worked with three Secretaries of State, my right hon. Friend the Member for Belper (Mr. George Brown), my right hon. Friend the Member for Fulham (Mr. M. Stewart) and my right hon. Friend the Member for Stepney (Mr. Shore). Relations with the D.E.A. in these areas have been very close and we have been very much helped by them. I would say the same of the Ministry of Power, the older Department, and the Board of Trade which for a long time has worked in close relationship between Government and industry.
In the new Department we are now able to weld together parts of the Government apparatus in maintaining and establishing good relations with industry, and we have to try to show industry as best we can how they can make the most use of us. For that reason I have described at length the way in which we propose to approach our task.
Ministers and policies come and go, but I hope the House will agree that it would be right to wish success to those who are working in the areas which now come within the Ministry of Technology because, however one looks at the matter, a lot of our national future is


locked up in the success that we may be able to achieve.

9.30 p.m.

Sir Keith Joseph: The Minister makes it all sound immensely plausible, but I think that the House has been listening to the biggest take-over bidder of all time. The right hon. Gentleman who is now Secretary of State for Local Government and Regional Development must have felt as though he was back once again considering merger and monopoly policy.
We are grateful to the Minister for explaining to us some of the mechanics and the reasoning behind the proposed changes. We do not deny that, on occasion, changes in the machinery of government have to take place, but we recognise that any such changes have their costs. A change is justified only if the benefit to be expected from it exceeds the costs in terms of distraction and diversion of effort imposed by it. When changes are well thought out, the disruption of the working life of the people concerned can be limited.
I imagine that into that category comes the departure of the Department of Economic Affairs. It has been long anticipated. I hate to think what morale must have been like in that Department during the last few months. It is a merciful release that the months of uncertainty and demoralisation have come to an end. I recall that, only a year ago, the D.E.A. was certified by the Prime Minister as being a permanent, essential and continuing feature of modern British government. Here is another case where the Prime Minister swallows his words within a matter of months.
The principal character in the cast is the expanded Department of Technology. I do not want to be too dogmatic in dealing with such a complicated and difficult matter but, to us, the changes summarised in the Order are misconceived changes to a misconceived Department, and I will try to justify that approach.
We believe that the Department is now too big for any Minister; and that is not a personal comment on the right hon. Gentleman. We believe that the changes

are bound to slow down the Government machine for some months. For months and months ahead, senior civil servants and Ministers will be distracted making the new machine work. We know that large numbers of civil servants will continue to work at their present jobs in their present offices. But, at the frontiers, where liaison is most important, there will have to be taken an enormous number of difficult decisions involving definitions of work and staff, and, by their nature, those decisions will have to go high up the hierarchy. It is not only in trade unions that demarcation disputes occur. They will be rife in Whitehall as a result of this Order.
We on this side of the House regard a Department as large and as interventionist as this one as a veritable nightmare. The costs which we envisage emerging in terms of distraction, disruption and diversion in our view cannot be justified by any likely benefit to the national interest.

Mr. Lubbock: Before the right hon. Gentleman leaves the point about the size of the Department, the Minister said that its budget would be £1,500 million a year and that it would employ 38,900 staff. I think that the budget of the Ministry of Defence is over £2,000 million a year. Does the right hon. Gentleman consider that the Ministry of Defence should be split up because it is too large? How will the size of the new Department compare with some of the others that we have?

Sir K. Joseph: I wish that the hon. Gentleman would let me get a little further in what I intend to say before drawing premature conclusions. I shall meet his argument by implication in what I have to say.
The right hon. Gentleman recognises that MINTECH is only another name—we think a bad one—for a Ministry of Industry. The Ministry has acquired a great number of new responsibilities since it was first established. There is nothing wrong in a Ministry of Industry as such. An appraisal of the effectiveness of any Ministry of Industry must depend upon the purpose with which it is employed.
Labour's approach is, frankly, evangelical. It is perfectly respectable, but


we do not agree with it. Labour takes a crusading view of the Ministry of Technology—the Ministry of Industry. Ministers in the Labour Government seriously seem to believe that they know best. We think that it is presumptuous for Ministers to try to teach industry what to do when Governments so palpably do not do their own job properly.
Moreover, we believe that this is primarily a private enterprise country. We earn our living in the world by private enterprise. The proper function of the Government, above all, is to make private enterprise work better. It is never perfect. I do not maintain that when Labour came into office the private enterprise system was in perfect order. It will always need change. But Labour has damaged the self-correcting mechanism of the private enterprise system by the tax changes that were introduced soon after they came to office.
Corporation tax distorted the link between the firm and those who invested in it, and the high marginal rates of taxation made things worse. They have throttled the shareholder. Labour is apt now to say that investors no longer matter. The limited liability company is one of the glories of British invention, and we say that all parties should do their best to improve the operation of that invention, not change it—[interruption.] I should be grateful if the right hon. Member for Manchester, Cheetham (Mr. Harold Lever) would reserve his wit for any windup speech that he tries to make.
Private enterprise has not only had to suffer the distortion of the system by ill-conceived Labour taxation policies, but also by the storms and hurricanes of Labour economic policies.

Mr. Alex Eadie: On a point of order. Are we debating this Department or the Labour policy of intervention as against a policy of free market forces?

Mr. Speaker: Order. I was about to intervene. We cannot discuss the fiscal policies of the Government or the whole general political background on this Order—at least not in detail.

Sir K. Joseph: I accept your Ruling, Mr. Speaker, but it is necessary for me to show that there are different approaches behind the different attitudes to this

Order. I am coming to the end of this part of my argument.
Now that he has a bigger Department, I hope that the Minister will not continue to be misled in his attitude to industry by the teachings of Professor Galbraith. The vast mass of industry with which the right hon. Gentleman will be dealing looks to the Government for a limited range of vital conditions. Industry as a whole looks to the Government for a stable and expanding level of demand, an encouraging tax system, an infrastructure, communications, power, education, social services, a legal system and a tariff system. It is the Government's job to see that these matters together provide a climate that encourages efficiency and enterprise.
The Minister claimed that there has been no clash with industry in his previous experience. Nobody doubts that industry likes a tap of public money. We question whether a tap of public money is good for industry. We believe that if the private enterprise system is worked properly most industry, but by no means all, should be left to flourish on its own.

Mr. Benn: I have often listened to this kind of speech. Is the right hon. Gentleman referring to the aircraft industry, the shipbuilding industry, the computer industry or the machine tool industry? These generalised election speeches have no bearing on the work of the Department.

Sir K. Joseph: This is not so. I am coming to those industries now. I say that by this new accretion of industrial responsibility a vast range of industry, which can perfectly well look after itself if our economic climate is right, does not require the special treatment needed by some industries.
We know that there are industries which look to the Government as their main client, particularly in the defence field, and other industries such as shipbuilding, which from time to time need Government help because of world forces. We know that there are pioneering industries, intensely heavy on development costs and risk, which do not find an adequate market for their products without some Government help. We realise that the country needs an understanding Government, robust entrepreneurs, proper respect for profits, and


a freely operating capital market, and that in the complicated world in which we have to live, with many of our rivals providing covert support for some of their industries, the Government must interest themselves in that part of industry which cannot flourish unhelped.
We recognise that, but we beg the Government not to extend the attitude of understanding help that is necessary for some industries in the form of subsidy to a wider range of industries than is absolutely necessary. The whole approach to the creation of this vast Department implies an attitude which suggests that all industry needs much more intervention by the Government than we believe is necessary. We believe that if the private enterprise system is enabled to work properly, much of industry can flourish on its own.

Mr. Benn: I should like the right hon. Gentleman to give one concrete example where, over the last five years, the Government's relationship with industry went beyond what was sensible in respect of what that industry might have needed to compete abroad.

Sir K. Joseph: I come as a newcomer to this subject, but I think that a cost-benefit study of the Government's operations in the machine tool industry might show that no great benefit has resulted to that industry. That is the sort of field in which we think the industry can well cope on its own, subject to fluctuations, and the rise and fall inseparable from the free enterprise market, without the expenditure of public money.
We are surprised, since the Ministry of Industry has been created under the name of the Ministry of Technology, that two of the main pressures that were available to the Government to encourage efficiency in industry have been left outside it. These are company law and tariff policy. There is no reason why complete co-operation should not occur between two separate Ministries, but we regard these two functions of Government as very important for the encouragement of efficient industry.
I come, now, to look at the division of work which the Minister has explained to us. First, he spent some time justifying the division of work on regional policy. It is impossible for any minis-

terial demarcation to put coherently into one Ministry every implication of each aspect of policy, but we wonder whether the two newly appointed Ministers will be able to reconcile their different responsibilities for regional policy.
The Minister of Technology is responsible for helping industrial efficiency. That is not always easy to harmonise with the I.D.C. and regional policy attitude to industry unless the Government adopt our policy of stressing, above all, infrastructure so that in its own interests industry goes where people are available to work, and where communications are first-class. Will the Paymaster-General say whose overall decision prevails between the Minister of Technology and the Secretary of State?
Now I look at the range of work within the Department. The essential centre of the Department is its procurement function. Here, I have no experience to help me, but we on this side of the House recognise the enormous importance of the skills of clientship that a Department must have in this difficult area. What we do not see is that it is necessarily ideal to keep the procurement function within the Ministry of Industry.
Our argument will be that this huge agglomeration of responsibilities, each calling for difficult decision-making by Ministers, imposes upon the Ministers concerned an impossible burden of responsibility. I emphasise that the procurement function must involve Ministers in a series of very difficult decision-making jobs.

The Paymaster-General (Mr. Harold Lever): Can the right hon. Gentleman tell me to which procurement functions he is referring in this Department?

Sir K. Joseph: The old responsibilities of the Ministry of Aviation, to which the Minister referred. Is that right?

Mr. Lever: Yes.

Sir K. Joseph: Good.
Then there are the responsibilities that have been taken from the Ministry of Power, where the skills of clientship are also absolutely vital. As the House knows, in power we have two monolithic single designs clients—the A.E.A. and the C.E.G.B. Here again, the skill of client-ship is absolutely vital, and we feel that Ministers will be called in for decisions


far more often than is practical when Ministers have such a wide range of responsibilities.
The industrial responsibility imposed upon Ministers in all the very awkward industrial areas of space, defence, computers and nuclear power, will also call for constant Ministerial decision-making, however much we are successful in mobilising entrepreneurship and risk capital. Merely going through the list indicates—in coal, with its present problems, and gas, with the problems of the North Sea—the Ministerial burden that this new Department will impose.
As for steel, the House will realise that my hon. Friends and I do not think that it should be a Government responsibility. But there it is. The Government have nationalised steel. I do not believe that the Minister even referred to the immense range of problems which are current in steel—the need to raise productivity, the endemic labour tensions the need to carry through—if that is the industry's decision—the movement to product groups, with all the regional strains and tensions involved. Here is a field all on its own to which the Minister did not refer, which will call for a great deal of Ministerial time.

Mr. Dalyell: On a point of clarification, would the right hon. Gentleman and his party keep the Ministry of Power in its original state? If so, how do they reconcile this with the clarion call to cut down the numbers of Ministers in the Government?

Sir K. Joseph: Some nationalised industries will call for different treatment. We very much regret that steel was nationalised. I am simply trying to draw the attention of the House to the aggregation of Ministerial burdens imposed by this Order. The Minister never referred to the steel industry. Everybody will agree that steel is filled with problems calling, from time to time, for Ministerial decision, simply because the Government those to nationalise it and take responsibility for it.
Then there is the whole range of research responsibility, where we suspect the Government are clinging to research empires which no longer in all cases fulfil a function. We believe that there should be a greater effort by the Government

to hive off research wherever possible to private enterprise, with development contracts where necessary, and to reduce the sphere of research covered directly by Ministerial responsibility.
The Government are responsible within this Department for a whole range of high technology decisions and there are other Ministers involved in many of them. I repeat: I am a newcomer, but I am not convinced that the Government have, in all cases, made the right decision on high technology, be it CERN or E.L.D.O. I merely mention this to show that, in this Department, a number of these high technology decisions will have to be made by Ministers with other Ministers, and again there will be a strain on Ministerial time—

Mr. Dalyell: rose—

Mr. Speaker: Order.

Sir K. Joseph: The high technology decisions, whether they are the immediate responsibility of the Department of Education and Science or of the Ministry of Technology, are obviously taken by Ministers, as the Minister himself said, in groups—sometimes formally and sometimes informally, but they certainly will impinge on Ministerial time—

Mr. Dalyell: CERN has nothing to do with it.

Sir K. Joseph: CERN was a decision of the D.E.S., but the Ministry of Technology—I appeal to the Minister—was bound to have been consulted about it and about many other high technology matters. That must be so. If I am wrong, no doubt the right hon. Gentleman will correct me when he winds up.
To add to this responsibility, there is the difficult and time-taking work involved in regional responsibility, with the immense number of decisions to be made about I.D.C.s, investment grants and all the old Board of Trade functions of regional deployment of industry.
Now, I come to perhaps the biggest job of all. We were encouraged to learn that the Paymaster-General will be handling it. That is the relationship with industry as a whole. Of course, contact with the Government is important, so that the Government should have an understanding of what industry needs and how the general pressures that the


Government exercise impinge on industry. We are surprised that tariff and company law should not march with this responsibility, but I only ask the House now to consider, when these responsibilities are added together, whether they do not impose impossible burdens on the Ministers concerned.
There are some other activities of the Department which we would gladly see reduced. The Government know that we are very sceptical about the need for I.R.C., certainly as it now is, if the private enterprise system were enabled to work properly. I am even sceptical of the need for an enlarged N.R.D.C., if the private enterprise system were enabled to work properly. I do not deny that certain industries and sectors cannot flourish for themselves in the present state of world competition, where some form of Government help is necessary, but there is a whole range of industry which can be enabled to look after itself.
We are convinced that, in addition to these tasks, which are more or less necessary, there are some industrial busy-body functions which are not justified at all. I would include among these the industrial liaison scheme of the Ministry of Technology. I believe that there is cause to have cost-benefit studies made in the work connected with the machine tool industry. Certainly, it is not possible for an outsider to condemn these, but simply to say that there is reason to examine them with some scepticism. We believe that the whole rigmarole of intervention is not worth a few general pressures properly exercised.
So, in our view, there are some things which are not in which should perhaps be in a Ministry of Industry, there are some things in that need not be in, and there are some things in that Government should not be doing at all. The result is far more than any Minister or group of Ministers can properly be responsible for. The temptation for an overwhelmed Minister is to run around in large circles, feverishly active, achieving relatively little. We fear that the Minister may find that this comes easily to him, but the penalty for industry is more serious. If we are right in believing that the tasks will impose more decisions than Ministers can give, the real needs of industry will not be pursued or understood or the

necessary persuasion or explanation done with other Government Departments.
The vast and amorphous jellyfish of a Department, we foresee, will be flabby and inert because it has been given too much to do. Delays due to size are just as serious as delays due to Cabinet committees. The Prime Minister has constructed a Ministry filled with divisions which will all need constant Ministerial decisions. We believe that those decisions will not be given. The Minister told us that there are about 100 civil servants or equivalent of the level of Under-Secretary or above. It will not be possible, m our view, for the Minister himself to know his top advisers, his top civil servants, and certainly access between the Ministers who have to give decisions and their advisers will be intensely difficult.
Are we asked to believe by the Minister that Lord Robens and the other heads of the nationalised industries will be content to deal with a Parliamentary Secretary, however virtuous and conscientious he may be? Of course not. The heads of industries will expect to deal with the Minister. In the fields which I have mentioned, decisions and interviews will fall upon the Minister. It is true that there are two Cabinet Ministers. What happens if they disagree? Do they take their disagreement to the Cabinet?
In our view the Department offers no coherent span of control. The art of a Government or of a Minister is to identify and to use the general pressure which will encourage people to do in their interests what is in the national interest. With this approach a Minister can have time for the difficult areas which abound in the field of the Ministry of Technology and which require specific Government decision or action. As conceived by the present Government and by this Minister—though not necessarily by the Paymaster-General—the approach which we should prefer will not be used. In our view the Minister will be torn into different bits by his excessive empire.
We certainly join with him in wishing all those concerned with the Ministry extremely well. We wish him personally well, although I for one wish that he had appeared a little more daunted by the scale of the job which he has taken on, because only if he is daunted will he and perhaps the Government begin to


shed the things which the Government should delegate or should not be doing at all.

Several Hon. Members: rose—

Mr. Speaker: Order. This last debate of the Session is very brief. Hon. Members have special contributions to make, if I can call them, and therefore I urge those who are called to be brief.

9.58 p.m.

Mr. Eric Moonman: The right hon. Member for Leeds, North-East (Sir K. Joseph) tried hard to make of a simple Order a serious philosophical disagreement between the two Front Benches. It is nothing like that. It is about decision making and about the structure of Government. Some hon. Members may feel that it is an innocuous document and others may feel that it does not interpret the true decision-making processes of Government. But certainly I do not believe that there is a philosophical difference between the two Front Benches and therefore much of the right hon. Gentleman's argument is that much less valuable than it might have been.
By Thursday next the mating referred to in the Order takes place. Implicit in the change is the desire to give an even better service for trade and technology by combining and co-ordinating three Departments. Yet it must be said that changes in structure do not necessarily change attitudes nor do they make staffs agree nor do they encourage the sharing of a common objective. We have had evidence of this, it seems to me, in industries where there have been mergers. We have also found evidence of it in the trade union movement.
I make this simple observation: the fact that the Government have taken this step and that it has been justified in a very telling speech by my right hon. Friend may not be sufficient. We need to go much further if we want to ensure that the people in the Government Departments concerned—as my right hon. Friend pointed out, it is a very large number—understand it and want to make it work. The Order requires careful attention, not only for what it says but because it omits certain key matters associated with Government-industrial

relations. I take the point, Mr. Speaker, that you wish hon. Members to be brief, and I shall be brief.
First, what are to be the functions of the State agencies in the area of Government industrial relations? There have been rumours in the newspapers—I naturally discount them and I would like to hear of this from the mouth of the Minister—on this issue. What is to happen to the Monopolies Commission, the Prices and Incomes Board and the Commission for Industrial Relations? Will they come within the ambit of the Ministry and, if so, how?
Secondly, is there to be a super board and is this being planned to match the super industrial Ministry? Rumours and anxieties have been expressed at the creation of such a colossus. I am not arguing the merits or demerits of the case but I am darned annoyed that neither a statement nor a hint hat been given of what the Government are cooking up on this point.
Thirdly, what was the reason for not including the science sector of the D.E.S. with Technology? There is increasing disquiet and disenchantment in the universities over the way in which the Government have failed to give the response to them that was promised.
Now we have a merger of Trade, Power and Technology and not a word about the rôle of the science sector. My right hon. Friend knows my concern to see this brought together with Technology. I have made this point to him many times, remembering that this is the practice in other European countries.
I must introduce a word of regret at the loss of two people connected with the merger, one indirectly and one directly. We all appreciate the efforts of my hon. Friend the Member for Middlesbrough, West (Dr. Bray) who when at the Ministry of Technology was of great help and proved a great resource to many hon. Members on both sides. We regret his move.
The other personal sadness I have is in the science sector, particularly as this is so closely related to the debate tonight. I refer to my hon. Friend the Member for Hitchen (Mrs. Shirley Williams). She too was of great assistance to us and it seems—in saying this I mean no dis-


respect to her successor—that she was able to see intelligently and with sympathy this association between Science and Technology.
Fourthly, what part is industry expected to play in this reorganisation? What will be the criteria for restructuring industry? Are we to wait for another Weinstock to emerge for a decision to be made in the dozen or so vulnerable British industries, or are the Government ready to adopt a dynamic approach, as they have over computers?
The computer sector represents a success story. I hope that the right hon. Member for Leeds, North-East recognises that this is a case where the Government took the initiative quite early on. They placed a great deal of money and expertise at the disposal of the management concerned. This has encouraged the establishment of a British company which is able to stand up to the great American giants.
In a recent tour of a number of East European countries which was undertaken by several of my hon. Friends and myself we were delighted to find that I.C.L. has not only gone into this somewhat difficult sphere of trade but in one country, in Czechoslovakia, has sold 21 machines. That has taken a lot of hard selling and service. We were impressed when talking with Government representatives and industrialists in East Europe to learn that this achievement arose because we had aggressive companies which knew the difficulties and were prepared to stay on the ground until the job was done. I should like to feel that this was an example to other British firms. However, the fact remains that support and assistance was required from the Government; and the success of the story reflects well on the intervention and approach which the Government took.
On the other hand, one might consider the way in which certain industries have not been stimulated. Consider, for example, nuclear reactors. Despite the fact that the Select Committee on Science and Technology is inclined to produce reports every couple of years urging the Government to take positive action no clear lead has been given.
Fifthly, how far does the proposed merger reflect the success or failure of

previous mergers? The Minister should tell us the precise position on this score. For example was the Ministry of Aviation and Ministry of Technology merger of 1967 as successful as originally anticipated? Does this new merger attempt to lift up productivity and make it comparable with what has been spent on research and development? This is a crucial question.
The new Ministry of Technology empire must succeed at two different levels, at deciding what to do and at doing it. We spend more on research and development than any European country yet our productivity grows more slowly. For example, aircraft represent 2 per cent. of our exports yet 15 per cent. of our Research and Development. Conventional industries earn for us four times as much foreign money as our science-based industries.
We need a national investment policy for research and development. This may be a different exercise but it must be done. American firms spend about £20 million a year on technological forecasting. If we are to get the benefit of our new Ministry it is essential that we look at such forecasting.
If the change implied and required by this Instrument is to be made, then something more than the merging of these Ministries is needed. A careful assessment must be made of work practices and performance and not simply of methods, which is perhaps a common affliction among civil servants when trying to be efficient.
When dealing with such a large number of people and when bringing together such important services one must examine the entire system. Some of the characteristics of systems analysis are worth noting if the merger is to bring about improved and co-ordinated services. Whether we have discreet arguments about the philosophical differences and whether we would prefer to see individual sections of the new Ministry placed elsewhere, the real test will be whether this new Ministry, call it Technology or Industry, will provide a better coordinated service. That is the criterion and we must not lose sight of it.
This means that the question of improving the system within the organisation is extremely relevant. It is in this connection that we must consider the


question of information collection, analysis and appraisal along with the improvement in decision making—for instance, the way in which decisions are taken now in both Ministries must come under sharper focus. The Minister will not be able to engage in matters of detail at, for example, the lower levels of decision-making in the new set-up and he will therefore need to allocate responsibility. That must be done at an early stage. In other words, he must satisfy himself that he has the right decision-making process at all levels, including the top level.
On the question of control within the Ministry a close watch must be kept on the various new standards of service and the performances of industry in different parts of the country. On specific industries, I ask my right hon. Friend to give attention to the industries of growth and innovation. He would agree that these are industries that will require greater care in the structure which he has proposed. I believe that they will be big business within the next few years.
Therefore, my right hon. Friend should say a word about the way that the new structure will give greater opportunity for these industries to flourish. I mention only a few—the small, nuclear reactor, video records, the small gas turbine, the all-electric motor car, specialised computer services, medical instrumentation and desalination.
There are many industries that other hon. Members will wish to mention, but it is important to show that the idea behind this merger and restructuring is not simply to create an empire, as was suggested by the right hon. Member for Leeds, North-East, but to give a better service. Better service in terms of industrial development, however, also means greater opportunities and greater exploitation of research and development.
I have offered these comments and criticisms briefly and, I trust, in a positive way. My right hon. Friend has a considerable task and responsibility in dealing with a service which is probably the most acute of all administered by the Government. Therefore, it will be under close scrutiny on both sides of the House. There is no doubt to me that my right hon. Friend is the most fitted person in the House to stimulate the enthusiasm to

make the merger succeed. I wish him well.

10.9 p.m.

Mr. John Biffen: I will endeavour to be brief. I wish to draw the attention of the House to the rather casual, almost unnoticed, way in which the Ministry of Technology has now emerged as a totally transformed Ministry with powers and implications quite without any of the original significances with which it was invested. I want to talk a little about the composite powers now contained in Schedule 1 and, finally, about the challenge which it contains for hon. Members on this side of the House.
In considering the Ministry, it is profitable to reflect for a moment back to the very initiation of this Ministry in the Machinery of Government Bill in the debate on 19th November, 1964, when Parliament was invited to take part in a series of actions, the very first of which was to legitimise the creation of the Ministry. My right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) said on that occasion that
it is a very odd Bill introduced in a very odd manner and involving some very grave issues of principle".—[OFFICIAL REPORT, 19th November, 1964; Vol. 702, c. 656.]
At that stage, one was still inclined to play it a little easy. In the debate, there were cracks about creating a prison without bars for Mr. Cousins. There was no vote on Second Reading. Again, on the Science and Technology Bill which created the initial component parts of the Ministry of Technology, there was no vote on Second Reading.
When the Ministry came to receive a transfusion by getting the power of the Ministry of Aviation, that was thought to be of such triviality as to be non-controversial business strictly for morning sittings. Although there was a vote on that occasion on the Closure because of some of the activities of my hon. Friends, who enjoyed the hilarity of those far-off days of the non-controversial morning sittings, there was no vote on the substantive Motion.
This evening, therefore, we now see this further immense accretion of powers. I take it that there will be no vote. If, however, all those incidents had been telescoped so that at one go we could have seen the intent and the implication of the creation of this Ministry, I believe


that the reaction of the House—not just of this side, but all sides—would have been a great deal more searching and critical.
I believe that the clue in our perhaps casual approach to this matter lies in the speech just given by the hon. Member for Billericay (Mr. Moonman), who said that the Order was a very simple one, rather like saying that the first Commandment is a very simple Commandment. In a sense that is true, but it does not make it any the less significant or, some people would say, any the less controversial. Therefore, we do not want to deceive ourselves, despite the rather bland and almost disarming innocence of the Ministry of Technology, that what we are being asked to do tonight is to assent to the creation of one of the most powerful industrial Ministries at work in any of the Western democracies.
My second point concerns the component powers that are now offered to this Ministry in the Statutory Instrument that we are asked to pass. As the Minister said in his introductory speech, this was to be a unified Ministry. He was not going to preside over a kind of conglomerate. It is interesting how the right hon. Gentleman takes over the language of the City and of the take-over jungle. He said that it was quite right that we should examine what the objectives of the new Department would be. He talked about the philosophy behind the change. Therefore, let not the hon. Member for Billericay chide my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) for talking about the philosophy of the differences when the word "philosophy" was first employed in this debate at the Box by the Minister of Technology.
Why should we be ashamed to dispute and debate the philosophy of government? In most cases, that is why we have been sent here. We have not been sent here to be pettifogging experts on moving the pieces of the Whitehall chessboard around, interesting and fascinating though that might be, especially for certain heavyweight columnists of the Sunday Press.
I asked my right hon. and hon. Friends and the House to consider the enormous accretion of power that is now proposed. There are the powers once vested in the

Ministry of Aviation. It is sad that the Minister presents the Order on the day that Rolls-Royce reports a slump in profits and a cut in dividends—not quite the success story that comes from association with government that is as presented by some supporters of the Government.
In Article 4 we have the Minister taking responsibility for the I.R.C. Many of us are taking increasingly hostile interest in the activities and actions of the I.R.C. Paragraph 1(f) of Schedule 1 deals with the vital spending and loan powers which the Board of Trade has exercised hitherto in respect of the aluminium smelters, and just to show how non-partisan I am I will refer to paragraph 1(e) and the embarrassing business of the pulp and paper mills at Fort William, Paragraph 4 deals with investment grants, and that goes a long way towards the £1,500 million to which the Minister referred.
In parenthesis, and in the regrettable absence of the hon. Member for Orpington (Mr. Lubbock), I point out that if we aggregate to that amount the £900 million investment programme for the nationalised industries it takes this Ministry above the Ministry of Defence in spending powers, and all the indications are that this is the Ministry on a rising curve and, if we understand them aright, the Government consider the Ministry of Defence to be on a falling curve.
Paragraph 3 of Schedule 1 deals with subsidies and physical controls vested in that sacred subject, the location of industry, and there is an immensely important ultimate sanction on capital spending of the nationalised industries in the power section referred to in Article 2.
We might ask ourselves to what end all these powers are collected and vested in a new Minister. I grant that it is difficult to regard the Minister of Technology and the Paymaster-General as twin standard bearers in the tradition of Keir Hardie, but I do not think that we ought to be too easily thrown off the scent of new style Socialism, and the principles referred to in "Agenda for a Generation". There, we read:
In the public sector, we should certainly consider the establishment of a new Ministry —to be charged with the task of looking at the whole field of public industrial development to promote an increasing measure of co-ordination in investment planning between the various Ministries and public agencies.


Is not that a superb description of what this Ministry sets out to do?
Of course, the Paymaster-General may ask, "What is wrong with that?" It is in his party's policy. But I am a member of a party which contests that policy, and does not regard this present legislative proposal as some kind of technical non-controversial affair.
The same Labour Party statement refers to
…the establishment of a new State Holding Company as the base for seizing new economic opportunities, including those in the development areas. We regret that public enterprise has not figured more prominently in regional economic planning.
Those, again, are the very powers now being transferred to this Ministry to enable that part of Socialist policy to be promoted.
Nothing could be more apposite to paragraph 1(a) of Schedule 1 than the reference in "Agenda for a Generation" to
The use of the Industrial Expansion Act to create new Industrial Boards, on the lines of the Shipbuilding Board, for other industries where crucial structural reforms must come.

Mr. Moonman: rose—

Mr. Biffen: I will give way in a moment.

Mr. Speaker: I hope that hon. Members will not seek to intervene. Many hon. Members wish to speak.

Mr. Biffen: I believe that the itch for intervention which is so apparent in "Agenda for a Generation" is already being consummated in this Order. That in turn raises the question what should be the attitude from this side of the House. I was delighted that my right hon. Friend the Member for Leeds, North-East made the specific attack that he did upon the Order. I accept his statement that this Department is too big for any one Minister, but I hope that the inference that is drawn from that is not to create another Minister but to dismantle as early as is possible major component parts of this Ministry and that, instead of "Agenda for a Generation", we shall have "Agenda for Freedom" and that there will be various parts of this empire which is being created by this Order which will be handed back to free enterprise.
I was delighted that my right hon. Friend picked out the I.R.C. as being obviously a candidate which he was regarding with the same sort of scepticism as I believe is widely felt on these benches. I could add many others. I shall doubtless have other occasions when I can do this in the year that lies ahead, for there is no doubt that this Order marks out the ground on which battles will be fought for the loyalties and the confidence of electors over the coming months. The Order should be seen as the challenge of the new-style Socialism which it certainly is. And it is a challenge which I gladly accept.

10.21 p.m.

Mr. Arthur Palmer: I do not know that I can necessarily agree with the arguments which have been advanced by the hon. Member for Oswestry (Mr. Biffen), but I confess that I rather liked the way in which he approached the subject, because this, as he said, is an important matter. The House of Commons never ceases to amaze me. The Order in front of us is a proposal for sweeping changes in government and the organisation of Ministries, and my right hon. Friend rather hopes that Members will be interested. I can assure him that we are definitely interested.
I am especially interested in the sad death of the Ministry of Power. When I read, I think it was in bed on a Sunday morning, that my right hon. Friend the Prime Minister had taken this decision I thought, "He has shot my fox"; because, if there is one Ministry that I have pursued on and off since I have been a Member on and off, it has been the Ministry of Power. It is a little sad that it is now being buried in this rather rough fashion at this time of the night.
It is worth recalling something of the history of this Department. It was started towards the end of the war years. It was during the lifetime of Mr. Macmillan's Government that the title was changed from "Fuel and Power" to "Power". This was heralded at the time with a mighty blast of trumpets, it being said that this was a new departure. No doubt Mr. Macmillan at that time tried to think of a new name. He obviously avoided calling it the "Ministry


of Energy", because that would have provoked unkind reflections. He called it the "Ministry of Power". The late Lord Mills was brought in to head it, if I remember rightly. In the end it was clear to most of us that it was simply a question of dropping "Fuel" from the title. Things went on much as before. It would, therefore, be a pity if this was the case again, because the main loser would be the House of Commons in the matter of parliamentary accountability.
The Order is strikingly simple. It just takes from the 1945 Act the words "the Minister of Fuel and Power" and substitutes "the Minister of Technology". That seems to be the substantial change in the Order in reference to the Ministry of Power. The effect is that the wide-ranging responsibilities within the new Department of the old Minister of Power go on just the same. It is worth looking at those responsibilities.
First, the Minister has responsibility for the co-ordination of all sources of fuel and power, not only in the nationalised fuel and power industries, but in the oil industry as well. He has specific powers of direction in relation to the national interest which are given to him by the nationalisation Acts. He has to approve the detailed capital programmes of the coal, gas, electricity and steel industries. He exercises many duties in relation to electrical safety. He appoints and looks after the nuclear inspectorate. He certifies electricity and gas meters for accuracy. Perhaps my right hon. Friend did not appreciate what he was taking on, but these are some of the jobs which he must do. Another responsibility—and there may be others—is that he has to carry through a vast range of informal consultation with the chairmen of the nationalised industries.
That is a rough and ready list of the Minister of Power's duties. I suspect that after we have agreed this Order all these duties and all this work will tend to go on just the same. It would be surprising if that were not so. It will be done by the same people and same officials. Papers will go into the "in" basket and out of the "out" basket. The same committees and sub-committees will meet, and there will be the same consultations and occasionally, inevitably, the same delays.
However, the respected Parliamentary figure occupying the former Minister's chair will not, I suspect, be my right hon. Friend the Minister of Technology, because presumably he will still be in his own chair, but my right hon. Friend the Paymaster-General, whose charm, ability and efficiency are known and respected by all of us. I take it that my right hon. Friend the Paymaster-General will answer Questions in the House, will open the fuel and power debates and, presumably, will introduce Bills dealing with the former responsibilities of the Minister of Power. But the difficulty from the point of view of the House of Commons is that in future the statutory responsibility will be not with the Paymaster-General, but with the Minister of Technology. In other words, my right hon. Friend the Minister will have the responsibility but the work will be done by the Paymaster-General and the House will find that in the matter of accountability the Ministry has passed one stage away from it. If I am wrong, I should be glad to be corrected.
This change represents, to a certain extent, a counter movement to that in which I have been active for three or four years, namely, the establishment of Select Committees, with the intention of bringing Ministers closer to the House for examination of their policies. I have no objection in principle to an enlarged Ministry of Technology or an enlarged Ministry of Industry. I believe that all Governments should treat industry as industry, whether it is privately or publicly owned. Therefore, I reject entirely the recommendation of a Ministry of Nationalised Industries made by the Select Committee on Nationalised Industries.
That is a misunderstanding of industrial reality. But from the point of view of Parliamentary control some very real problems do emerge when one attempts to place side by side under the umbrella of one Ministry industries that have such different responsibilities and relationships to Government.
The true logic of this change, which has administrative merits, is that the legislative straitjacket in which the nationalised fuel and power industries are at present held should for the future be loosened. There is then a better chance of the new Ministry standing in roughly the same fair relationship to all the industries,


whether publicly or privately owned; to enable the publicly-owned fuel and power industries to evolve, develop and diversify according to their own judgment, their own needs and according to commercial conditions.
Then I think it would be proper in the future for the inspectorate and licensing duties of the Ministry to be transferred to independent Ministries. The Ministry of Technology should not in future be concerned with enforcing electrical safety regulations, for example. That, surely, should now be done by an independent body. This argument could be applied to several other statutory duties of the present Ministry of Power, which should probably never have gone to that Ministry but which were taken over from previous Ministries. This issue should be carefully sifted; the general public and workers in the industries should be independently protected and the Ministry not allowed to be judge in its own case. In short, it is not good enough by itself to bring together into one grouping the responsibilities of previously separate Ministries without looking in a philosophical spirit at what those Ministries will do when joined in a new whole.

Mr. David Price: For greater clarification, when the hon. Gentleman speaks of independent Ministries, does he mean independent public agencies?

Mr. Palmer: I do not know about that; it would need to be looked at in particular cases. Electrical safety, which to a considerable extent is now the responsibility of the Ministry of Power and is to be the responsibility of the Ministry of Technology, might be undertaken entirely by the Department of Employment and Productivity under the Factory Acts as successors to the Ministry of Labour, because the safety of employees and the public is concerned. This is just one example of what I have in mind.
The House of Commons must look to other Instruments to exercise its responsibilities in these changing circumstances. I am doubtful whether the process of parliamentary questioning and Adjournment debates has anything like the effectiveness it once had when Ministries were smaller and more closely in contact with the House as a whole. I need hardly say that the instrument that

I would recommend would be the greater extension of Select Committees generally, because Select Committees have the advantage of being able to examine all subjects of the Crown on all matters of public interest.

10.34 p.m.

Mr. Peter Blaker: In opening the debate, the Minister attached importance to the informality of discussions between Ministers, and he instanced the consideration of the Concorde project. He painted a picture of Ministers meeting, without any papers, informally, to discuss this project. This alarmed me. I spent a long time as a civil servant, and one of the great problems, it was clear to myself and my colleagues, was to make sure that one's Minister knew what he was talking about when he went to a meeting with other Ministers. If the Government have adopted the practice of having informal meetings without papers, that may explain a great deal of what has gone on over the last five years.

Mr. Benn: That is a fair point, but none of the decisions or reviews which the Government engage upon on the Concorde project is done other than after the most careful and detailed analyses have been produced. But, in the kinds of projects concerning the Board of Trade, ourselves and other Departments, an informality of practice is very helpful.

Mr. Blaker: I am grateful to the Minister for that assurance. However well briefed Ministers have been on the Concorde and whatever practice they have adopted, it has not led to any effective control of costs.
Yet that is not my main point. If there had been time, I would have liked to follow my hon. Friend the Member for Oswestry (Mr. Biffen), because I find myself in agreement with much of his speech.
I want rather to take up two modest points. The first concerns the division of responsibilities between the Ministry of Technology and the Board of Trade. The Board of Trade will be a severely reduced Department. Broadly speaking, it will have responsibility for the service industries, for matters like company law, and for export promotion and import policy.
In terms of responsibility for the service industries, the separation of powers between the Ministry of Technology and the Board of Trade is likely to be unfortunate. Here we have a situation which perpetuates the lack of importance which the Government have attached to the service industries. It is clear that the Minister of Technology is to be the golden boy of this Government. This is the high-powered, dynamic, purposive Ministry to which will be attached so much importance by the Government. Indeed it has two Ministers in the Cabinet.
With a truncated Board of Trade, which will have a less powerful voice in the Cabinet, we shall see perpetuated the error of this Government, of which the country is now becoming aware, of attaching less importance to invisibles than to manufactures.
One of the other responsibilities of the Board of Trade is for export promotion and import and tariff policy. Here again, we have a situation which has its dangers. We have the big Ministry responsible for manufacturing. It will listen to the voice of manufacturing industry, which, no doubt, will press for protection. We have the less important Ministry responsible for tariff policy. That situation is not a happy one.
My second point is about the problem of demarcation disputes. I think that we shall see a lot of them over the next year or so. I quote one example, because it is symptomatic of the situation.
I put down to the Minister of Technology for answer tomorrow two Questions about supplies of nickel. It is a subject causing industry a great deal of concern because of the shortage of supplies and the fantastic rise in prices recently. One Question asks what action the Minister is taking to overcome the present shortage. The other Question is about the level of stocks. The former Question has been transferred to the Board of Trade. The other one has not and presumably remains with the Minister of Technology.
If one Question was to be transferred, I would have expected it to be the other one. One would have thought that the Minister of Technology would have re-

tained responsibility for saying what is being done to overcome the present shortage. However, that has been transferred to the Board of Trade, and the Minister of Technology will deal with the level of stocks. I mention this as an example of the kind of problem which will arise. Perhaps the Minister, in winding up, will tell me why that transfer has been made and, if he can explain that, why the other Question was not transferred as well.
Another point concerns the demarcation of responsibility between the Ministry of Technology and the Ministry of Local Government and Regional Planning. I understood the Minister to say that the Ministry of Local Government and Regional Planning would be responsible for regional economic planning, including responsibility for the regional economic planning councils and boards. He said that his Ministry would take over from the Board of Trade responsibility for I.D.C.s and investment grants, and, in addition—and this is the important point—the responsibilities which the Department of Economic Affairs had previously exercised on regional economic industrial policy.
For the last couple of years I have wrestled with the problem of trying to clear up the division of responsibility between the Board of Trade and the Department of Economic Affairs over regional economic policy. I have asked the Ministry about it, but I have never been given a clear explanation. The best that I could discover was that the Department of Economic Affairs was responsible for the formulation of broad policy when it came to regional economic matters and the Board of Trade was responsible for its execution.
I hope that I shall be corrected if I am wrong, but I understood the Minister to say that in future his Ministry will be responsible for the formulation of regional economic policy and for its execution, and that the Ministry of Local Government and Regional Planning will also be responsible for the formulation of economic policy. The Minister shakes his head. I must have misunderstood him. Because of the importance of regional economic policy to the House, perhaps the Minister will make the position clear.

10.43 p.m.

Mr. Robert Sheldon: The hon. Member for Oswestry (Mr. Biffen) called this change one of the most powerful Ministries of any Western democracy. I will not try to imitate the hon. Gentleman's florid language in this revelation, but it is clear that we are witnessing a massive accretion of power to the Ministry and a very important change in the machinery of government.
The Fulton Committee had something to say about the machinery of government. Because of the shortage of time I will not quote from paragraph 293 of the Report. It is sufficient to comment on this paragraph that the idea of setting up a Royal Commission to examine the machinery of government was dismissed because it was outside the Committee's terms of reference. But, as a member of the Fulton Committee, I was against an examination by Royal Commission for another reason: that any change in the machinery of government in a modern world is a continuing process.
We cannot wait for a Royal Commission to report on these matters, because they change too rapidly. The effect of the benefits that might be obtained from an examination would, to a large extent, be lost. I prefer to see a continuing change based on changing reality.
The Fulton Committee discussed secrecy, and in paragraph 280 stated:
This shows that open government is possible; we suggest that the Government should set up an inquiry to make recommendations for getting rid of unnecessary secrecy in this country.
The Prime Minister agreed with it and we all agreed with it in a debate in this House on the Fulton Report. Nevertheless, very little was done in this respect, and further action has been very disappointing. An inquiry was set up, but it did not produce very much lessening of secrecy within the Civil Service.
The important thing about the changes that we are witnessing here is that two tenets of the Fulton Committee have been offended. There was no recommendation for a Royal Commission on the machinery of government, but it was accepted that there would be an open discussion on the subject. If one argued for or against a Royal Commission, one was arguing about methods, not that this matter should not be discussed.
The second Fulton tenet that was offended was that relating to secrecy. We asked for a massive increase in the amount of open discussion on the methods of government, and here we are introducing a massive change in the machinery of government. This is a matter of immense importance, yet it was not discussed as we requested. The matter was dealt with in secrecy. We are told that it was not even discussed in the Cabinet.
I feel very sad that this proposal did not receive the attention that it ought to have received. Had it been discussed openly, the experience of hon. Members and those commentators who are becoming increasingly knowledgeable on these matters could have been brought to bear on the subject. We are led to believe that the Minister; themselves did not tender any advice on this matter. If that is so, it is very sad, because they could have given a great deal of information about the way in which their Departments function.
This is arrogating to civil servants far too important a position. Once we exclude political comment and discussion, either within the House or outside it, we arrogate to civil servants far too important a rôle in deciding how the country is run. This is a very serious matter, because the way in which these matters are organised to a large extent determines a number of decisions that flow from that. Once we leave these matters to civil servants to decide, the whole decision on the shape of Government Departments is left to them.
The reasons given for this course of action are secrecy and administrative convenience. Arguments can always be adduced for doing things secretly. When industrial mergers are proposed, employees become apprehensive about their jobs and about the changes proposed. The Government realise the need to refer mergers to the Monopolies Commission. The delays caused by such a reference create a great deal of difficulty, but the Government accept that such delays are a lesser inconvenience than mergers that are wrongly planned. If the Government decide these matters on behalf of industry, they must not decide that in their own interests secrecy is paramount.
I feel very sorry that these changes have been brought about in this way. I


hope that the Government will learn that this House and the people can be consulted, that their advice can be heeded, and that we can all take part in a debate on these important matters.
Having said that, I must tell the House that I support the Motion. I support it because I see clearly the distinction between a Ministry of Industry and a Ministry of External Trade. I always felt that there was this clear division between industry itself and external trade—which was very much muddied by the Board of Trade and the actions of various Ministries. That they have got it precisely right is unlikely, because there are bound to be some changes between the various Departments, but broadly it is right. The distinction can be made between industry and external trade. This is broadly the sort of situation we have now, and I feel that it is a very important step forward.
But the big task that the new Ministry of Technology has is to create a climate between Government and industry different from what has existed for the past century, or even longer. It is because of our industrial history that we have had a climate of suspicion between Government and industry. It is part of a tradition which we share almost uniquely with the United States. In the United States and Britain industry started by itself, and Government came in subsequently to regulate the activities of industry. So industry looked upon Government with suspicion, as somebody that always meddled.
Countries with which we can compare ourselves more readily in the modern world—countries like Japan, France and Germany—do not have this tradition, because in their cases—in Japan almost entirely—Government created their industry, so that industry looks upon Government as a friend—as people who come up with ideas worthy of support and worthy of taking into account. This kind of partnership is natural to countries in a similar situation to ourselves in terms of industrial development and the need for exports, but they have a tradition which because of our background we have not been able to obtain.
One of the important things is that we have a piece of machinery which can do this—the Ministry of Industry—which I hope will be in a position, as in Japan,

and other countries, to back projects, to back men, which is even more important and, most important of all, to create a new breed of men in Government circles who understand industry and can work with it. We must have an educative process between one and the other. We must not have a Civil Service type and an industry type, unable to communicate with each other. We must have to an increasing degree people who can move freely between one and the other—who can create a partnership, so that Government can bring to bear some of the advantages that they have in seeing the overall view and so that industry can see the problems of Government in having to move in certain directions.
That is the hope that I have for the Ministry, and that is what prompts me to accept the Order.

10.54 p.m.

Mr. John H. Osborn: I came into the debate with mixed feelings. I have always borne in mind, particularly in recent debates, words of many of my hon. Friends that all Governments are incompetent, so the less we give them to do the better. I would add that the larger a Ministry grows the more difficult it is for that Ministry to undertake the task given to it efficiently and effectively.
My interest, coming from an industrial background, has covered such fields as science, which will rest with the Department of Education and Science and which only indirectly involves this new Ministry; commerce, exports and imports, which are mainly Board of Trade matters and are still outside the concern of the new Ministry; investment grants and the regional location of industry, which will now be the concern of the Ministry; technology, in the scientific sense, in which this Ministry will still occupy a pioneering role, as in recent years, and heavy industry and power.
My hon. Friend the Member for Oswestry (Mr. Biffen) has reflected many of my own reservations when he and I have been in debates concerned with the growth of the Ministry of Technology. This is another revolutionary arrangement which complies remarkably well with the concept so lucidly explained in "Agenda for a Generation". So, if


Conservatives are suspicious, hon. Members opposite must realise that it is because of their propagandists and the documents which they produce at their party conferences.
The Minister has glibly and in an attractive manner outlined the rôle of his new Department. I say this with no disrespect, because we are discussing tonight a matter of great moment—the growth of one more Ministry. He said that there are 38,000 staff in the Ministry of Technology, of which nearly 10,000 will be qualified scientists and engineers. The budget is about £1,500 million and capital expenditure in power alone is £900 million. To what extent can efficiency be combined with such scale? As Minister of Technology, the right hon. Gentleman supported the activities of the British Institute of Management, and expertise in modern industrial management has been one of the responsibilities of his Department. Surely the Prime Minister has set him a problem of communication and co-ordination between the various divisions of the Ministry. Might he not have to dismember some of his activities so as to retain the efficiency of the Ministry?
I said that I entered the debate with mixed feelings, since I, like many others, have supported the concept of a Ministry of Industry, embracing the nationalised and private sectors, this to include the concept of Technology, so that I have favoured a Ministry of Industry and Technology. To continue to describe this Ministry as a Ministry of Technology is surely one of the biggest misnomers of all time; perhaps some of its functions should be among those cut off. Aviation in its present form also sticks out like a sore thumb, and that could be considered in the near future. But it is too early to judge this Ministry in its new clothes. I will not follow my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) in discussing the merits and demerits of intervention versus private enterprise being allowed to get on with its job.
We have spoken of suspicion between industry and Government. If industry is bled white with high interest rates, the credit squeeze, corporation tax, and higher social security contributions and is fighting for profit margins, it is no won-

der that some companies have staggered under the burden. I do not imply that these industries consider that the Ministry of Technology has had a part to play in this ducking operation. Anyone who is drowning will clutch at a straw, and some have found such a straw in the Ministry of Technology. When the Ministry has the lifesaving apparatus, its help has been accepted and welcomed, but in the circumstances, does this increase or decrease the suspicion which goes with the new rôle of this enlarged Ministry.
The machinery for intervention in industry has never been more powerful. Many hon. Members opposite have accepted that there has been an accretion of power, resulting in excessive control of industry from Whitehall, requiring Ministerial decisions of great moment. Will Ministers be able to do the necessary homework to understand the many problems which they will have to tackle in this field?
The Chairman of the Select Committee on Science and Technology, the hon. Member for Bristol, Central (Mr. Palmer), spoke about the rôle of the Committee. A Ministry of this size will have to be looked at by Parliament, but many of its activities I would prefer to see not the concern of Parliament at all. There will be the problem of Parliamentary Questions. May we be given some lead as to what will happen next Session? Three Ministers have been answering Questions on a subject which is to be handled by one Minister. Will there be extra time for Parliamentary Questions? In what other way can we supervise the vast capital expenditure of this Department? I hope that in concluding the debate the Minister will indicate how Parliament will tackle the problem.
Reference has been made to the Fulton Report. I have developed on other occasions the thoughts of the Romanes lectures by Winston Churchill in which he considered the concept of a Third Parliament. We have not yet seriously thought of that possibility in the House. The main concept was that it should deal primarily with economics rather than with industry, but might not this be an essential development if one Ministry is to deal with all industry.
It is relevant that we still have science as an academic subject separated from


technology. It has been suggested that the Minister of Technology should take science on board, too, but heaven forbid; he has enough on board already. It is as well that it is left with another Ministry. There were suggestions that in the Ministry of Power one Minister will be responsible for the industry supplying equipment to the electricity industry and for the electricity industry and that the same Minister will be responsible for the industry providing equipment for the steel industry and for the steel industry itself. So far so good, but will he be able to co-ordinate these differing any better? I should like an explanation of how this will be possible.
It was not my intention to speak for long, but in previous debates I have asked the Minister of Technology for a more elaborate explanation of these activities—more elaborate than the Written Answer which was given yesterday. I urge him to provide for the House and industry an organisation chart which has already been published in the Blue Book.
It is essential that the existence of this new Ministry should be looked at in the near future from the point of view of the industrialist, whether his concern is on the one hand with the technological or a scientific aspect of his business, or on the other hand, manufacturing operations. What are to be his new relations with the Government after these changes have been made? Most industrialists have not yet absorbed the significance of the proposed changes in so far as they concern the relationship between Government and industry or, more particularly, industry's new partnership with the Government. I am in some difficulty because I have always supported a partnership between industry and Government. I would not oppose extending this partnership. But I urge hon. Members opposite to understand that unless the Government remove the suspicion that this move has aroused, that relationship will be very difficult to establish. There is a suspicion that there will be increasing intervention and direction by Whitehall. If the Ministry exercise that type of direction too viciously that suspicion will not be removed and the Ministry's task will be all the more difficult.
We have a Ministry of Technology with a bigger rôle and new Ministers in office. In previous debates we have wished Ministers well when they have taken on new powers. I wish them well on this occasion. I would sooner see them succeed than fail. I assure hon. Members opposite that management, staff and the shop floor in industry want them to succeed and not to fail. The responsibility as to the outcome is theirs.

11.5 p.m.

Mr. Alex Eadie: I think that it would be churlish if we did not wish my right hon. Friend well in his new Ministry, although I must add that I would have preferred this experiment to have taken place earlier in the life of this Parliament rather than near the end of it.
One of my hon. Friends has spoken of the Minister of Power in terms of "bribing the fox" but I must say that to some extent I have "shadowed" the Minister of Power ever since I came into this House and would ask whether there is any attempt at "bribing the fox" now. I want to assure my hon. Friends that there is considerable difficulty for any right hon. or hon. Member in following the Minister of Power, and there would be a very considerable difficulty in resuscitating the Ministry of Power.
I was not at all clear in my own mind, when my right hon. Friend the Minister of Technology was speaking from the Front Bench about mining, what it was that he meant when he mentioned pit closures. Would my right hon. Friend tell us how he sees his responsibility for the mining industry in relation to the question of those closures? We have heard of technological efficiency, but I hope that we shall not just have technological efficiency without administrative efficiency. I hope, in other words, that we shall not have administrative efficiency for efficient administration's sake, but will see, and be told, the reasons for decisions about pit closures.
There are hon. Members on this side of the House who will object very strongly to any acceleration of pit closures if they are told simply that such and such a pit has been closed for administration's sake. I find myself in some difficulty when I hear that one Ministry only is to be responsible for


the formulation of economic activity in this sphere, but that my right hon. Friend's Ministry is to be responsible for its implementation. I am confused, and I think that there is some confusion on the other side of the House as well.
This is especially important so far as economic activity in Scotland is concerned. What relationship has the Minister to the implementation of economic activity in Scotland? What part does my right hon. Friend the Secretary of State for Scotland have to play? Has there been any change in his powers? I believe that many of my hon. Friends would like to know that answer and, on that note, I will finish.

11.10 p.m.

The Paymaster-General (Mr. Harold Lever): This has been an interesting debate, with a tone of moderation prevailing, although certain fundamental as well as detailed questions have been raised. I will try, first, to deal with the general points, and then go into detail as I proceed.
What we have done is not to take any new powers. We have aggregated the powers which obtained until new proposals were made. If I may be rash enough to make a criticism of the Government that has not so far been made, it is that this has been too long delayed rather than it being premature and too impetuously undertaken, as my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) suggested.
There has been considerable public debate of this issue for a long time. I suggest that, if anything, this restructuring of Government follows events which have pointed to it for some time; and, as it develops, this step will prove to be welcome to those who seek increasing efficiency and the businesslike operation of those Departments of Government which are particularly concerned with business.
The more one accepts the responsibility of the Government in business matters, the more the Government are obliged to be businesslike. This is a businesslike proposal and although it is easy—I sympathise with the feeling of many hon. Members about this—to be apprehensive of a very large Department with a large personnel, I emphasise that no new powers are being taken and that this is an orderly aggregation of existing powers.
In making this rationalisation, we have institutionalised the view that macro and micro economics to some extent march together—this was sensed by the right hon. Member for Leeds, North-East (Sir K. Joseph)—that nationalised and private industry should not be locked in watertight compartments, and that there should be a Department which is responsible for the greater part of our nationalised industries and in continuous contact with and maintaining a two-way dialogue with the private sector, or with 80 per cent. of our national industry.
That is the purpose of this exercise and I accept that if one holds the philosophy, which was frankly expounded by the right hon. Member for Leeds, North-East and supported by his hon. Friend the Member for Oswestry (Mr. Biffen)—not to my surprise—that the function of Government is to, as he put it, engage in management of demand, to make the proper fiscal arrangements and provide a suitable infrastructure in which industry may operate, so that the rest can be safely left to operate spontaneously to the ultimate collective advantage, thereby creating a climate favourable to prospering industry, then such a theory is very wide of reality.
Indeed, the concept of the modern Government's duty is different from that of the pre-war Government, who thought that the weather and the overall out-turn of the economy were not their responsibility but that of more divine rulers. That concept has been abandoned. Once one accepts that the Government have an overall responsibility for the out-turn of the economy and for its performance, then it is impossible for one to stick for long to the naїve view that all that the Government need do to give effect to that responsibility is to engage in the turning on or turning off of the tap of demand—or, in the more popular language of debate in the last 20 years or so, to engage in the use of the break and accelerator. A modern economy cannot be run that way, not with the responsibility which any modern Government have and with the concepts which the right hon. Member for Leeds, North-East and his hon. Friends have boldly advanced today.
For example, how does one bring about the major structural changes in industry that are required? How does one, for example, restructure the coal industry


by creating a climate favourable to enterprise, profit and employment? Only one organisation, the Government, can do it and one cannot leave to individual firms, however well intentioned, this task of restructuring industry, and no country needs the restructuring of industry more vitally than ours.
That is because we were pre-eminent in industrial development. For this reason—for this heritage which applies to us more than to any Western European country—we have out-of-date industry which needs to be restructured to adapt our country and economy to the task of earning the high standard of life to which we have become accustomed. It was earned in the days of our industrial pre-eminence. Only by adaptation will we be able to keep this high standard and make our industry viable in the face of competition.

Sir K. Joseph: That may be true of some industries, coal mining among them, but most industries will respond to the market. If the steel industry had not been nationalised, the restructuring of the industry would have taken place spontaneously, some parts of it growing and some going bankrupt, under private enterprise, far more efficiently than will now be the case when every change needs the approval of the Minister.

Mr. Lever: I was going on to refer to the steel industry. It is not as if it did not have many opportunities to restructure itself. No one who looks at the industry as it was taken over by us could claim that it was then in a posture for the task which faces it in the modern British economy, struggling to maintain the high standard of life which we earned in the past and have to earn in the future to maintain it.
The steel industry is a case in point, but there are others, like the textile industry. Even the right hon. Gentleman and his hon. Friends were led to abandon their pure doctrine and to attempt the reorganisation of the textile industry, belatedly and abruptly, instead of seeking the continuous dialogue with industry which we are seeking in this new Ministry of Industry, as it were. They left things as they were, according to their doctrine, until the facts of life forced them to intervene.
The right hon. Gentleman's predecessor Government intervened in the steel industry in the case of Colvilles, rightly as I thought at the time, because although my party was suspicious of the right hon. Gentleman and his hon. Friends, my attitude was that if a man steals your clothes you may challenge his integrity, but you ought not to challenge his sartorial taste. They were interventionists, but they only intervene belatedly and without the set philosophy and without the coherent economic plan or philosophy to direct their intervention.
Unless the right hon. Gentleman and his hon. Friends—and I do not wish this to happen—wish to be represented as Rip Van Winkles, they will have to do better than this. I am positively astonished that anybody can make the assertions the right hon. Gentleman made to which I have referred. This is not the only aspect in which one cannot justify the attempt of Government to take over economic responsibility and discharge it by the broad brush strokes of macro-economics. There is a whole range of activities where nobody could seriously challenge that something more detailed is required if a macro-economic policy is to work at all.
It is easy at the golf club bar, or even an enthusiastic part of the Conservative conference—provided that one does not choose the Young Conservatives—to assert in a generalised way that the Government are intervening in a meddlesome and destructive manner but they have been long on generalisation and short on condescending to particulars. We have not heard of a detailed case of meddlesomeness by the Ministry of Technology, as it was under my right hon. Friend.
Although I do not usually repeat compliments—while I have heard a great deal about generalised complaints about "big brother" from people who have not been subject to intervention by that Ministry, from the industrialists who deal with my right hon. Friend. I hear with total unanimity a story of useful work which that Department has been doing under my right hon. Friend. I do not hear any of this talk of arm twisting, "big brothering" and other horrors for which my right hon. Friend is thought


to be responsible and for which, presumably, he will be responsible in an even bigger way.
To come to the point of the bankruptcy theory advanced by the right hon. Member for Leeds, North-East and the hon. Member for Oswestry. I often think that the hon. Member is so wed to and determined in his out-of-date views that he thinks that because his watch has stopped, time has stood still. He really ought to look at some of the things that have been happening during the last 20 or 30 years around us. Let me give him two examples.

Mr. Biffen: May I assure that right hon. Gentleman that far from feeling that, I am constantly embarrassed, for example, by the way in which the Government, in their adherence to the theory of the money supply, are coming round to views which I have been advocating from this bench for some time?

Mr. Lever: I can perfectly understand the hon. Member's preference for the 19th century. What I must, however, question is his continually acting and arguing as though he were still there.
Let me take some of the points which might have come to the right hon. Gentleman's and the hon. Gentleman's attention when they advanced these philosophic arguments, as they call them. Do they believe in regional help? Do they think that we should not have brought into being the aluminium smelters? These are not broad-brush strokes, but are the larger micro economics. Should we have abandoned the computer industry? Does the right hon. Gentleman realise that when we have, for example, a policy of encouraging efficiency, and encouraging efficiency which inevitably produces redundancies, it means that sometimes one takes a factory—I think of a specific case—takes over its work, put it in another factory and one ends up by doing the job of two factories rather more efficiently in one with fewer people, although it means, however, redundancy in human terms?
Does the right hon. Gentleman really think that it is no responsibility of Government, morally and economically, to provide the work for the factory and for the men who have been displaced, or help to do so? Whom does the right hon. Gentleman think will provide that

work if the Government, with their knowledge, information services and the like, their access to and continuous contact with private and public interest, do not do so? If they are as indifferent as they are invited to be by the right hon. Gentleman, when these firms are closed down as industry is modernised and rationalised, who will play the rôle of speeding up the employment of these people and of these idle factories? I know that the right hon. Gentleman will say that in the right climate this will all be done by private enterprise with great speed, but the Government do it with great speed. They attempt to co-ordinate the efforts of private industry so that, more surely than would be the case by the natural processes on which the right hon. Gentleman is anxious that we should rely, these human beings will not even temporarily, for not an unnecessary day, be left on the scrap heap and these valuable factory premises are not an unnecessary day left idle and unused.
Another matter which the right hon. Gentleman and his hon. Friends seem to forget is that we are living in a modern world in which even Conservative Governments have accepted that there will be a large sector, although not as large as we have it—they would rather have it a little smaller—in which we must have nationalised industry. Must the Government take no responsibility for co-ordinating some of the efforts of private industry and nationalised industry?
Let me give the right hon. Gentleman two examples of where any objective industrialist would reject outright the kind of naїve doctrine which we are asked to applaud this evening. One is in nuclear design. Members of the right hon. Gentleman's own party on the Select Committee recommended, perfectly rightly, that left to itself, private industry would result in fragmented 50 or 60 design teams for nuclear power stations. Of course, we are not to have 50 or 60. Had we done as was suggested to we would have had 50 or 60 half-baked nuclear power station design teams and certainly not the two which we have brought about. The reason we have been able to bring them about is because here was an attempt to co-ordinate the needs of the public electricity service with the availabilities of private construction and supply.
By organising the matter, as only the Government could organise with the help of nationalised industry, on a rational basis, we have ended up not with the spontaneous generation of fragmented, half-baked design teams in great and unnecessary number and with contractors not knowing whether or not they were likely to get orders and so unable to prepare to meet orders with efficiency and foresight.
When we have perfect harmonisation of the public industry in relation to private industrial nuclear design teams attached to them, a whole host of private contractors know that they have a first-class design team—not organised spontaneously by private industry. They know that the use of their design teams and facilities will be worked in an orderly way, because the electricity industry will plan their need with them, and the possibility of these design teams and the private supply firms delivering the necessary power stations in accordance with the need.

Mr. David Price: The right hon. Gentleman does not have his facts right. There were not 50 or 60 design teams looked at by the Select Committee—there were three, as he knows from the Report. My Socialist colleagues proposed one based on the A.E.A., while those with the minority view suggested two, which is what the Government have taken. The right hon. Gentleman has not done his homework.

Mr. Lever: But the hon. Gentleman forgets that inside those private contracting firms there were design teams. There were only three overall, but there were design departments and teams in all sorts of fragmented forms all over industry that hoped to play a part in nuclear design contracts.
Another duty of Government is to see how far the buying power of the nationalised industries can be used in support of private industry. I can think of a case in point, where we are at present seeking to arrange that orders shall be given to an exporting house by the nationalised industries so as to give it the possibility of retaining a sufficient

industrial base to maintain its exports. But that cannot be done unless Government condescends to consult on the details, which the right hon. Gentleman and his friends wish us to ignore.
The right hon. Gentleman complains that the Ministry is too big, yet suggests that we add to it responsibility for company law and some aspects of tariff and fiscal policy within it. We simply cannot do that.
Again, the I.D.C.s involved detailed effort. We intervened to assist smallish groups of industrial firms so as to alleviate restrictive practices, at the group's request. This is the kind of work we do, and this is the work that is described as meddling by those who do not participate in it, but which is warmly welcomed by the private industry concerned.
What is also very important is that there should be a dialogue in which we acquaint private industry with the overall purpose of the Government's economic strategy. The reverse process should take place. We should be made continuously aware of the needs of private industry and nationalised industry, and of the co-ordinated needs of the whole of industry. The great task in relation to private industry is to set the scene where the more efficiently competitive a firm is, the more profit will accrue to it in serving the collective advantage and the overall economic needs of the community.
This is not a doctrine that anyone need be ashamed to support, and I think that in supporting it and stating it as the object of the Department I am stating the partnership of industry, national and private, which is the central objective of this new, large and rationalised Department.

Question put and agreed to.

Resolved,
That an humble Address be presented to Her Majesty, praying that the Minister of Technology Order 1969 be made in the form of the draft laid before this House on 13th October.

To be presented by Privy Councillors or Members of Her Majesty's Household.

EDUCATION (PRE-SCHOOL FACILITIES)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Armstrong.]

11.30 p.m.

Mr. William Hamilton: It is a very great privilege for me to be the first Member on the Floor of the House to congratulate my hon. Friend the Under-Secretary on her elevation to the Establishment. She assumes office equipped with a wide variety of practical experience of all kinds, but especially in nursery education. She will add a refreshing dash of colour and verve to the Ministerial ranks in the Department. I only hope that the force which burned inside her when she was on the back benches will not be quenched by the burdens of Ministerial office. I am sure they will not be. It is worth pointing out that, probably for the first time in the history of public education in the United Kingdom, we have three lady Members of Parliament holding Ministerial office, all of them with a genuine working-class background of education.
It is almost exactly three years since the Plowden Committee's Report, "Children and their Primary Schools" was presented to Parliament. It is a great pity that there has not been a full day's debate on this invaluable Report. Indeed, I was inspired to seek to obtain this debate precisely because I had not read it as well as I might have done up to the summer holiday.
Chapter 9 of Vol. 1 of that Report made some pertinent comments on the provision for education of children before the age of compulsory education—that is, up to 5—and pointed out what many interested in education and otherwise are apt to forget—that the under-5s are the under-privileged of our education system. From 1944 onwards we have made increased provision throughout the education service—in primary schools, in secondary schools of all kinds, in the universities, in technical education, in further education, and now the open university. All this has been done despite the gloom and pessimism of the two "Black Papers" which have been referred to repeatedly in the House and outside.
However, nothing has been done for the under-5s. The Plowden Report observed that the proportion of children attending any form of school before the age of 5 had hardly changed between 1930 and 1965. The figure was about 5 per cent. in 1932 and rather less than 7 per cent. in 1965.
The reason there has been no advance in provision for the under-5s is that it has been argued by successive Governments that children within the statutory ages of compulsory attendance—that is, 5 to 15—must have a prior claim on the limited resources in teachers and cash. That is a very strange doctrine that should have been challenged more strongly than it has been in the past, since all educational and child psychologists tell us that the most impressionable years in a child's life are precisely those years from 0 to 5. Not only has there been no significant growth in nursery provision for 30 years and more, but the location of nursery schools and classes has borne no obvious relationship to needs.
My attention has been drawn to an article in the magazine New Society of 9th October, by Tessa Blackstone, a lecturer in social administration at the L.S.E. She emphasised the wide variations in the provision of maintained places between one county and another: 70 per 1,000 of the child population between the ages of 2 and 4 in Cambridgeshire, 68 per 1,000 in London, 27 per 1,000 in Lancashire, 1 per 1,000 in East Suffolk, and less than 1 per 1,000 in other places, including Leicestershire.
In the county boroughs the disparity was on a similar scale. The highest in the county boroughs was 199 in Leicester, and the highest numbers, generally speaking, were in the North and the Midland industrial towns and also in the provision for social classes 4 to 5. The lowest provision in the county boroughs was in Eastbourne, Wallasey and Solihull.
The writer of the article could find no obvious correlation between the amount of provision and the need for it on grounds of inadequate housing, large families, the number of working women, and so on. She concluded that the policy of the Government—I presume that she meant the urban aid programmes—will alter the current distribution and bring to an end the haphazard growth which has characterised development up to the


mid 1960's, and I hope that proves to be right.
Whatever might happen, there is an enormous leeway to be made up. As I have said, Plowden showed in 1965 that only 7 per cent. of all children under 5 were receiving some form of nursery education, either school or class, and even when the Government's urban aid programme is carried out, both the first and second phases, the percentage will not be significantly higher. I hope that my hon. Friend will be able to give the figure, but I do not think that it will be very much higher than the 7 per cent. referred to by Plowden.
When we get an increase in the total number of full-time nursery places—10,626, I think, is the figure, and I do not want to belly-ache unduly about it—the increased provision will be a significant landmark in post-war educational history. For the first time, resources have been made available specifically to expand nursery building and will attract 75 per cent. grant.
Will my hon. Friend say what will be the total cost of this? As I understand, the first phase of the urban aid programme for nurseries will be £1·35 million, which was announced last January The second phase will cost about £1·335 million, making a total of £2·685 million.
According to the Ministry Press notice dated 4th July, 1969, the Government have decided to increase the amount to £4½ million. That is good as far as it goes, but looked at in the context of the total education bill of £2,000 million plus it represents a tiny fraction of 1 per cent. of the total. In addition, there is provision for day nurseries, which are the responsibility of the Department of Health and Social Security, and some children's homes which are the responsibility of the Home Office. There is also provision for family group homes and family service units, and I know that my hon. Friend is interested in the fact that play groups appear in the programme for the first time.
Perhaps I might add a brief word about that. The joint circular issued on 7th February indicated in paragraph 13 how local authorities could help voluntary bodies. The aid that the local authorities give will qualify for the 75 per cent. grant, and the departments con-

cerned point out that it might be desirable for local authorities to consider the appointment of play group advisers, with salary eligible for grant.
Perhaps my hon. Friend can give details of the response to that from local authorities. A number, notably Conservative-controlled, are using the excuse of the credit squeeze for not doing what they should be doing, and some will be singularly inactive. Unless pressure is brought to bear on them, the response will not be what my hon. Friend would wish. I hope that she will use her powers and influence in the Department to see that they do what is required and expected of them.
One point in this context is that the local authorities which go in for this kind of activity have to convince the Department of the social need for play groups. That is an expression incapable of exact definition. I have in mind my own area, and no doubt the same applies to my hon. Friend's. In any new town or relatively new community or development area where there is a growing demand for young female labour, there is a similar demand for this kind of facility. The education authorities in such areas will have to be able to convince the Department that, for the purposes of qualifying for the 75 per cent. grant, there is a social need for this kind of facility.
Inevitably, from the purely economic point of view as well as the educational one, more and more resources will have to be made available for nursery education. The Plowden Report comments on the fact that more and more married women are going out to work. The numbers are increasing all the time. The figures given in Plowden showed that, between 1931 and 1951, the proportion of married women in employment doubled. I suspect that it has gone up very fast since those figures were made available. It is true that not all of them have young children, but many have, and their numbers are growing. It is arguable whether it is good or bad for these women to go out to work, but they are going out, and no one can stop them. This is very much a problem in my own constituency.
One of the important points to consider in this context is that the contribution made by such women to the national


economy should be offset against the cost of providing nursery schools and classes. There are professions which are becoming increasingly staffed by part-time married women. I have in mind the nursing profession and, to some degree, the teaching profession. These women are making a significant and valuable contribution to the economy, and that should be offset against the cost of increased nursery provision.
The Plowden Report made a tentative estimate of between £16 and £22 million a year as being the contribution of married women to the economy by 1979. But, whatever the value attached to it in economic terms, the social and educational advantages of increasing the provision of nursery accommodation are overwhelming, and I am sure that my hon. Friend will share that view. Clearly, parents believe it passionately.
I believe that the demand for nursery facilities far exceeds the supply. The Plowden Report pointed out that in one urban area where there were 1,818 children attending nursery schools and classes, there was a waiting list of 5,410—in other words, for every one nursery school place there were three children waiting—and in two-thirds of the nursery schools the waiting period between application and admission was at least one year.
It is regrettable, in my view, that wealthier parents can usually buy places at independent nursery schools. The New Society article to which I referred pointed out that in the Home Counties, with predominantly middle-class and relatively wealthy parents, there is the largest independent provision, and in the county boroughs the lowest maintained provision was at places like Eastbourne and Ipswich, which were also among the highest providers of independent places.
I repeat, there is an unsatisfied demand existing on a large scale: children, deprived for one reason or another, living in what I regard as social monstrosities—high tower blocks of flats that housing committees usually tell other people to live in—others deprived because of inadequate family backgrounds, overcrowded or broken homes, and handicapped children. The demand is enormous. I hope that my hon. Friend will exercise her persuasive powers in the Department and with the Treasury to

make sure that, although we have made a start, the impetus which has been provided does not run into the sands.
In Table 10 of the Plowden Report an estimate was made showing that 745,000 full-time equivalent places would be needed by 1975 and 776,000 by 1979. That is a measure of the challenge facing my hon. Friend and the Department. Knowing my hon. Friend's attitude to this matter, it is with great diffidence that I ask the Department to look at the note of reservation on parental contribution to the cost of nursery education by Professor Ayer and others on page 487 of the Report. That reservation was signed by some people who were regarded as progressive, almost Left-wing; people in education who drew attention to the fact that contributions from parents were expected and were asked for and obtained in countries like Poland, the Soviet Union, France, Denmark, and others. If the choice is between not having any more nursery education at all and seeking to make parental contributions, I hope that the Department will have an open mind on the matter. I ask that the matter should be examined.
I am sure that my hon. Friend will do a useful job in the Department, and that we will soon see some results.

11.49 p.m.

The Under-Secretary of State for Education and Science (Miss Joan Lestor): First, I should like to thank my hon. Friend the Member for Fife, West (Mr. William Hamilton) for his good wishes on my appointment. I am pleased that he has made it possible for my initiation at the Dispatch Box to be on the subject of the under-5s, in which he knows I have a special interest. Listening to his speech, I do not think that I could have put it better.
I do not want to spend too long on the importance of nursery education. It is obvious, as was brought out in my hon. Friend's speech, that children in this country start full-time schooling at five years of age, which is a year earlier that in most other countries. But for most children this is still their first impact into full-time schooling, because they have had no pre-school or part-time school experience. It is clear from the reports to which my hon. Friend referred,


with which we are all familiar, that preschool experience at either nursery school or play group is of great value to any child before starting full-time schooling.
This is why Lady Plowden's Committee recommended that there should be a large expansion of nursery education, beginning at once in the educational priority areas, and I agree with the points added to this by my hon. Friend about the impact and the establishment of the high blocks of flats which are usually inadequate in play space. The position today in relation to traffic and play space for children out of doors makes the whole question of nursery education and the provision of proper play facilities for children a very important one indeed.
Before I go into the steps that we are taking to meet the recommendations of the Plowden Report I want to give a brief account of the present pattern of nursery education in England and Wales. I have not time to deal with Scotland, but that is in any case the responsibility of my right hon. Friend the Secretary of State for Scotland.
In answer to a Question on Thursday my right hon. Friend gave some figures for 1968. In January, 1969, there were about 600 nursery schools in England and Wales, 500 of them maintained by local authorities, whose expenditure on them has risen from £3 million in 1963–64 to £4 million last year. The rest are direct grant or independent schools.
These 600 schools contained about 35,000 pupils, nearly half of them attending part-time. In addition, about 70,000 children under 5 were in nursery classes attached to primary schools—10,000 more than in 1967. In all, nursery provision is available for about 6 per cent. of our 3- and 4-year olds. On top of this there are 150,000 rising 5s in the primary schools, that is children admitted to primary schools at the beginning of the term in which they become 5.
The distribution of these nursery places, though haphazard and largely unplanned as a result of wartime provision, from which we have really been carrying on, to some extent already reflects the social needs of some of the areas. In a number of industrial cities in the North and the Midlands provision in maintained nursery schools and classes was made for about 20 per cent. or more

of the 3- and 4-year olds as long ago as 1965. In one or two places it actually exceeds 30 per cent. In the counties, naturally, there are fewer places, but London, the West Riding, Durham, Staffordshire and Lancashire, with their concentrations of industry and poor living conditions, were to be found among the top 10 in 1965.
I know that my hon. Friend is concerned that in some places the admission of children to nursery schools and classes is not always related to social need, and this is important. It must be for local authorities and head teachers to decide which children should have places when the demand exceeds the supply, but inquiries show that in most areas priority is given to children with difficult home backgrounds of one sort or another.
Let me turn to the steps that we are taking, as part of the urban programme, to implement the Plowden recommendations about the expansion of nursery education in deprived areas. In answer to a Question on Thursday, my right hon. Friend the Minister of State said that 10,000 additional nursery places in deprived areas had been included in the first two phases of the urban programme this year, at a cost of nearly £3 million. When allowance is made for part-time attendance, considerably more than 10,000 children will benefit from these places. More than 400 new nursery classes will be provided in areas of severe social deprivation, by about 70 local education authorities. Because of the special importance of this provision, the Government are paying a 75 per cent. grant towards the expenditure of local authorities on this and other provision under the urban programme.
And this is only the beginning. In all, we shall spend £20 million to £25 million on the urban programme in the first four years alone, and, despite other claims, including those highlighted in the recent report of the Select Committee on Race Relations, a substantial part of the remaining resources will go to nursery education in the deprived areas. To this end the Department is supporting a number of research projects designed to evaluate new approaches to the teaching of the under-5s.
Let me now turn to the important provision for under-5s made outside the


public sector. It has been estimated that as long ago as 1965 there were between 3,000 and 4,000 independent nurseries and play groups registered with local health authorities. The number has certainly grown rapidly since then, and I pay my tribute to the thousands of voluntary workers throughout the country who have made this possible. My Department has recognised the valuable advisory work done by the Save the Children Fund and the National Association of Pre-School Play Groups by renewing and increasing the grants that it makes to their headquarters—a point raised by the hon. Member for Norfolk, South (Mr. J. E. B. Hill) in a supplementary question last Thursday—and more staff for play-groups are being trained in colleges of further education.
The hon. Member also asked me whether we would encourage or empower local authorities to appoint play group advisors. The Plowden Committee recommend that local authorities should be encouraged to give financial or other assistance to nursery groups which fill a need which they themselves cannot meet. As I told the hon. Member on Thursday, the statutory responsibility for pre-school play groups rests with my right hon. Friend the Secretary of State for Social Services and local health authorities. The Government are considering the recommendation in the Seebohm Report that at local authority level they should fall within the responsibilities of the pro-nosed social service Departments.
Meanwhile, I can tell the House that, as part of the second phase of the urban programme, the Government have approved for grant expenditure of about £150,000 by local authorities who are helping pre-school play groups in deprived areas. Here again, further progress will be made in later phases of the urban programme.
It is fair to describe the progress that is being made under the urban programme, both in the public and in the private sector, as the first major breakthrough in the provision of nursery schools and classes since the war. Because re-

sources are limited we must concentrate them on the areas where the needs are greatest. How far and how quickly can we go ahead and expand nursery education in other areas where, at present, additional nursery classes can be provided only if this will enable married women with young children to return to teaching? This depends, like everything else, on the progress of the economy and on a choice between the many urgent demands on the resources available for education as a whole.
I am aware of the point made by my hon. Friend that married women returning to work make a substantial contribution to the economy, but I would also stress that the nursery school, as such, is not designed to enable married women to return to work. It is the day nursery that caters for women who wish to do more than part-time work.
On the question of increasing resources by charging fees—which the minority Report attached to Plowden mentioned—this would require legislation, which cannot be discussed in this debate, but in the 1944 Act it was laid down that pre-school nursery education should be regarded as a free educational right, as all other forms of education, within the statutory school years. I see no reason, at the moment, to change this in any way.
We are approaching the raising of the school-leaving age and a tremendous increase in the demand for higher education, which means that we will have to look very closely at the available resources. But the Government will see that the young children at the other end of the age range, and their parents, get a fair share. We will build on the progress already made. The under-5s have for far too long been the under-privileged in terms of education and other facilities, but they have now firmly staked their claim to a greater degree of priority in this field.

Question put and agreed to.

Adjourned accordingly at one minute to Twelve o'clock.